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While chain drug stores across the Mid-Atlantic states and the Northeast helped residents prepare for Superstorm Sandy by stocking extra emergency supplies, the retailers also stepped up to the plate after the storm hit to help in the recovery effort.
Walgreen Co., for instance, donated $250,000 to the American Red Cross and was taking donations from shoppers at all of its Walgreens and Duane Reade stores during the week after the storm hit.
Meanwhile, CVS Caremark Corp. and Rite Aid Corp. each gave $100,000 to the Red Cross.
Executives at the nation’s three largest drug chains say the impact of the storm was particularly acute for them because so many of their stores were affected by the hurricane that morphed into a winter storm.
“Many of our communities on the East Coast were affected by Hurricane Sandy,” CVS senior vice president of corporate communications and community relations Eileen Howard Boone says. “We are deeply concerned about the impact this storm has had on our customers and colleagues, and we are committed to supporting relief efforts and assisting first responders in any way we can.”
Drug chains were not the only community pharmacy operators to donate to the Red Cross’ relief efforts.
For instance, Ahold USA and its Family Foundation gave the organization $2.5 million; Target Corp. gave $500,000 ($425,000 in cash and $25,000 in gift cards); and Publix Super Markets created a program where customers and employees could directly assist those impacted by the storm.
Under the scheme, customers could make a donation at the supermarket chain’s checkouts with the money being channeled to the Red Cross and designated specifically for Superstorm Sandy disaster relief.
“Our customers and associates have trusted Publix to react and help those affected by tragic circumstances,” media and community relations director Maria Brous says. “This disaster to the Northeast hits close to home, as we have many customers who reside in our operating areas during the winter months.”
Retail forecasters estimate that in the week after Superstorm Sandy hit, retail sales in the Mid-Atlantic and Northeast fell by nearly $4 billion.
According to MasterCard Advisors’ SpendingPulse, the region, which accounts for slightly less than a quarter of retail sales nationwide, typically generates $18.7 billion in sales (excluding auto sales) during the first week of November. But revenue came in at about $15 billion.
As a result, the retail data service says that nationwide sales total for the October 28 to November 3 period — typically around $78 billion — dipped to about $74 billion.
Forecasters say the storm’s economic impact may continue to be felt well into next year.
According to Eqecat, a firm that tracks hurricanes and analyzes the damage they cause, losses from the storm could total $30 billion to $50 billion.
Some economists have said the storm could shave a half percentage point off the nation’s economic growth in the current quarter.
More immediately, some are saying that Superstorm Sandy is likely to cause holiday spending to decline this year.
“The states affected by Sandy account for approximately 16% of all holiday spending,” notes Richard Feinberg, a professor of consumer science and retailing at Purdue University. “And even a small decrease in their spending will have a large impact on national numbers.”
Feinberg had been expecting about a 4% increase in nationwide holiday retail sales compared to a year ago. Now he expects the increase to be between 2% and 3%.
“Even if things returned to normal before Thanksgiving, optimism and consumer confidence are likely to be lower, affecting spending on gifts,” he says. “Consumers will be suffering from what we might call post-Sandy traumatic stress, which will lower their inclination to spend.”
While chain drug retailers up and down the East Coast readied for the storm by stocking extra emergency supplies such as batteries, bottled water and first aid supplies, they were not ready for the damage the storm did to their stores.
Rite Aid, for instance, reported that eight of its stores in the path of the storm were substantially damaged. On the day that the storm made landfall in southern New Jersey, 790 Rite Aid stores were closed. All but one of those outlets. however, was able to reopen within two weeks.
At Walgreens 750 of the 1,400 stores it operates in the impacted area were forced to close. A day after the storm, that number had been reduced to about 500.
