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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