Storm May Deliver Better Deals for Consumers

Online shopping expected to escalate as storm strands shoppers.

ByABC News
December 27, 2010, 2:38 PM

Dec. 28, 2010— -- Retailers may be feeling the holiday blues as a powerful snowstorm in the Northeast keeps thousands of residents stuck in their homes. But that could also mean good news for consumers, as retailers further mark down already reduced merchandise to push inventory out their doors.

The current storm comes during what is an important week for stores and bargain hunters. Post-Christmas sales can contribute more than 15 percent of a retailer's total holiday sales, according to the National Retail Federation.

But road closures and dangerous conditions tend to deter shoppers from getting to stores.

Marshal Cohen, chief industry analyst for market researcher NPD Group, said the storm has been "brutal" for retailers, which will have to scramble to recover their lost sales.

"Because of the storm, the stores lose a chance for a first impression," Cohen told ABC News. "When consumers return merchandise, it may be the first time they enter a store or go shopping, so they see the crowds, the discounts, etc. If you lose that chance for a first impression, you lose a lot. ... Holidays just got shortchanged because of this snowstorm."

Cohen estimated that because of the snowstorm that began Sunday -- expected to be one of the top six days of retail for 2010 -- stores would lose about 0.5 percent of their total holiday sales.

Yet other experts say the blizzard wasn't enough to dampen the spirit of post-holiday shoppers, especially because so many stores opened as early as 5 a.m. and the storm didn't limit people's mobility until around dinner time.

"This storm will have a very minimum impact on the retail forecast," said Joseph De Rugeriis, senior marketing manager for Planalytics. "Stores opened yesterday between 5-7 a.m. and the storm didn't really limit people's mobility until around dinnertime."

Right before the year ends retailers tend to reduce prices in an effort to unload their inventory and make room for next season's new merchandise and products.

That desperation to offload merchandise may mean good news for bargain hunters who are not quite ready to put away their credit cards.

"What we're seeing now is that retailers are insecure about revenue. The confidence that they had in early December and mid-December is basically gone, and they're worried about getting inventory off the books, so the storm just makes that worse. It makes them more paranoid about having too much inventory," Brad Wilson, founder and editor-in-chief of Bradsdeals.com, a daily deals website e-mail, told ABC News. "They have a very legitimate vested interest in pricing it well so they can get it out."

Experts said consumers should look for deals, particularly in electronics and such perishable goods as chocolate and gourmet goods.

Prices for TVs and other electronics on sites such as Amazon are edging closer to where they were during Black Friday, Wilson said. The reason is retailers have to make way for new models, which will devalue and lower the price of the products currently on the shelf.