You're listening to stock on Bloomberg Radio. More than twenty hundred flights have been canceled between today and Friday this as of the year early morning. This all according to flight aware dot com. This includes more than flights today in twelve hundred tomorrow. This because of Hurricane Matthew bearing down on the southeastern United States. Also many closures of stores, government offices, tourist attractions all being closed because of the hurricane.
Here to tell us more about the effect of such a natural disaster on consumers and consumers spending and local economies is Sema Shaw are consumer consumer discretionary analysts for Bloomberg Intelligence. Seema, thank you very much for coming in, and of course, it is a very serious and dangerous situation currently taking place, not only in Florida and the coastal regions of the It States Eastern seaboard, but also the we noted the Bahamas and also Haiti was devastating
lee target hit by the hurricane. Tell us your thoughts on on what this is doing right now to the economies um for retailers specifically, it depends on really what category and discretionary you are and how you'll be affected. So The beneficiary is, if there is anyone, would be the home centers, the home depots or lows. Prior to a storm, people tend to stock up on generators, im plywood to prepare their homes than themselves for the upcoming storm.
Another beneficiary maybe the grocers as people stock up on necessities and consumables after the storm. Depending on the extent of the damage, there could be a benefit to home depot and lows into Q four and even into two thousand seventeen, which is sort of what they saw after Sandy. They saw a boost to Q four comps and then again in the first half of two thousand thirteen. At that time they saw a boost to sales as people
continued to rebuild um But the storm is hitting. It looks like it's expected to hit on over the weekend, which will hurt likely hurt discretionary retailer. So those selling things that maybe you were just doing for fun, mall based retailer's department stores someone like a G n C or an altar, you know, specialty apparel, because you probably would stay home. So when analysts look at the numbers, will they just automatically discount of home depot sales, for examples,
suddenly look really great. Will they say, well, but you know the the hurricane, people bought stuff before and after if somebody's sales are suddenly down, will they be very quick to say, oh, you know, we have a lot of stores in the path of the hurricane, and soone
discounts it right. Well, Usually what will happen is during the conference call, the companies will either break it out and say that they estimate X number of basis points benefit or compression from the event, and analysts usually back it out or just for it and the next year when they look at comparables, just to make it a
like for like basis. And just to note that both Lows and Home Depot have activated what they described as their hurricane center, right, and that's to activate their supply chains and to get necessary items down their batteries, flashlights, other things that people might need in a disaster, so
they have greater supply and their stores. Both companies, all their stores are have backup generators, so they will stay in the store and remain open as long as it's say, for their employees and if they're restocking or getting any kind of shipments. Presumably this is that part of it, well, it is fairly short lived. In other words, if FedEx can't fly stuff around for them, they have a distribution center,
so they'll probably already will prepare. There's a lot of this stuff is in stock for them for the most part, and I'm sure in the days prior when they saw I was coming. So I will just mention that the home depot in South Dixie Highway in Miami is already closed, so they may have rolling closures of a lot of these right, depending on things. Well, of course, it seems like the uh state of Florida has been very I mean, the President was warning people. Everyone's saying, take this seriously.
Uh yeah, And I think that's probably a result of what's happened in prior disasters. Repeat will stay and then you have the first responders who end up putting themselves in danger. So I think this is just you know, it's better safe to be sorry and better to be prepared. So retailers that can help customers are going to try. And the other one, I mean, maybe they'll get a little bit of a hit, but as long as there's
no permanent damage to their structures, they're probably be okay. Well, we of course we are thoughts with everybody in Florida and hope it maybe decides to go back east out to see Sema Sea. Thank you so very much. Consumer discretion analysts for Bloomberg Intelligence breaking down how the hurricane could have thanked the big real retailers along the East Coast