Higher Heating Bills Might Keep Shoppers Home After Rough January

After inclement weather in January led to weak mall traffic, retailers have another challenge to face: “the hidden heating ‘tax.’” KeyBanc analysts say the extra $50 to $200 in heating bills may cause consumers to pull back on discretionary purchases this spring.

How much could higher heating costs represent?

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After miserable weather in much of the nation led to lower mall traffic last month, retailers have something else to worry about: higher heating bills.

“Higher heating bills could have a lagging impact as consumers begin to receive and pay” them, KeyBanc analyst Ed Yruma wrote in a note Tuesday. The colder weather could add $53 to $200-plus onto the average winter heating bill of $600 to $2,000, he wrote, potentially cutting into discretionary spending this spring.

Sub-zero temperatures and heavy snowfall kept many shoppers at home last month, and Weather Trends International is now calling for the coldest February in 21 years, according to a note from J.P. Morgan analyst Matthew Boss.

Retail companies like Buckle, Bon-Ton, and Ascena Retail might be impacted the most by the higher heating bill effect, given their concentration of stores in the Midwest and the Northeast, and their lower-income consumers, KeyBanc’s Yruma wrote.

Ike Boruchow, an analyst at Sterne Agee, said retailers without significant e-commerce operations will be especially hurt by the tough weather.

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Estimated impact of weather on winter energy bills:

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Sapna Maheshwari is a business reporter for BuzzFeed News and is based in New York. Maheshwari reports on retail and e-commerce.
Contact Sapna Maheshwari at

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