Sales projections for the 2015 holiday season have included a lot of uncertainty for retailers.
In the Midlands and some other areas of South Carolina, October’s floods could have an outsized influence on shoppers’ behavior, experts say. For Christmases past, they say, buying a vacuum cleaner, cutting board or lawnmower for a spouse may have been forbidden or at least in poor taste.
This year, those may be the best gifts ever.
“For the people affected by the flood, it is going to be years – years – before they get their lives back on track,” said Marianne Bickle, retailing department chair at the University of South Carolina.
While the pace of news events may have some believing South Carolina has “moved on” from the thousand-year flood that ravaged the region in early October, Bickle said, that’s not true.
“That’s sad,” she said. “The people whose homes were destroyed, it will take months and months (for them) just to understand where they stand financially.”
The Federal Emergency Management Agency has not released figures yet on how many Columbia-area homes were destroyed by the more than 12 inches of rain that fell in many areas of the state.
Likewise, it is unclear how many homes were heavily damaged, or the total value of the lost buildings, furnishings, clothing and other belongings destroyed.
FEMA eventually will release data detailing the number of residents impacted and their locations, said USC research economist Joey Von Nessen. Economists will use the data to determine the total economic impact of the flood in the Midlands and South Carolina as a whole.
The National Retail Federation has predicted the average U.S. consumer will spend $805.65 while Christmas shopping this year, including for food, gifts and decorations. That is virtually unchanged from 2014, when consumers were forecast to spend an average of $802.45.
The federation projects spending on gifts for family members to reach a survey high of $462.95, up from last year’s $458.75.
Those projections may hold up for many South Carolinians, but not all.
“How would you emotionally cope with only having the clothes on your back?” Bickle asked. “Now let us compound that with small children who don’t understand that Santa isn’t real.”
Children will still expect Old Saint Nicholas to come down the chimney and fulfill a wish list, Bickle noted. But their adult parents’ Christmas wish lists may be for clean sheets, towels and food, she said.
Kitchen utensils, bedding and clean toothbrushes may be missing items for flood victims this Christmas, Bickle said.
“So, the holiday season really does transform back to what it originally was planned for: being grateful for your lives and your family, and putting things into perspective,” Bickle said.
Some retailers, including national chains, say they have carved out special promotions this Christmas season aimed specifically for victims of the South Carolina floods.
“Yes, we have assisted a number of customers looking for appliances (small and large) and televisions this fall, specifically with the intent to replace items after the flooding,” said Danielle Schumann, Best Buy spokeswoman.
The company is running a sale on major appliance purchases of $399 or more through Wednesday, with discounts of 25 percent to 40 percent, plus free delivery. The company is also offering special financing specifically in the flooded regions, Schumann said.
Many residents whose losses were covered by insurance have already been compensated, said Russ Dubisky, executive director of the S.C. Insurance News Service, a property and casualty insurance association.
But many losses suffered in the flood are not covered, he noted.
While it’s good for retailers to offer financing for flood victims, Bickle urged homeowners to be cautious. A mortgage may still be owed on the house lost in the flood, she said, and until FEMA gives details about the assistance that may be given to owners, their financial situation may be unclear.
“It is still too early in the game to know clearly where they stand,” she said. “So, I think that many of the consumers affected by the floods will be cautious on what they spend for Christmas.”
Families and friends of those affected by the floods will likely spend on practical, yet fun, gift items, Bickle said.
“It is about getting back to normal, but also helping people not affected by flood understand that we are not anywhere near normal,” Bickle said.
Von Nessen agreed.
“I think we can say it (the flood) will redirect purchases within the retail sector toward more goods and services related to home improvement,” said Von Nessen. “I think that is very clear.”
Likewise, some purchasing this Christmas will be directed away from retail to construction, he said, creating a “crowding-out effect” of normal gift-giving.
The effects of the flooding are very localized, Von Nessen said – some households were devastated while many others were not affected at all. It also remains unclear how many homes in the Columbia area sustained extensive damage, he said. So, it is unknown whether the redirected spending expected this year will be enough to “move the needle” on Christmas retail spending as a whole, Von Nessen said.
“I think there will be some redirecting of spending, some crowding out, but we don’t know what the extent of that is yet,” he said.