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Winter freeze affects businesses and consumers

January 27, 2014

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As accuweather reports, "on multiple dates this month, temperatures have been warmer in Alaska than they have been in Texas, Louisiana and much of the Atlantic coast."

There’s so much happening this month and next for business writers to focus on, but sometimes you need to bow to the forces of nature.

Record-setting winter weather like most of us haven’t experienced in quite a while is on the tip of most tongues and as it persists for weeks, is rippling through pretty much every sector from insurance and transportation to retail and agriculture.  Earlier in January, the business weather firm Planalytics (a good site to bookmark) said the Polar Vortex would cost the U.S. economy $5 billion; with conditions not improved more than two weeks later, and worse in some areas, that estimate likely has grown.

Some industries are hurting, while others are mixing snow and sleet with a little chutzpah to tout niche products like elective surgery refund insurance.  Yes, as this press release “Inclement weather spikes need for cosmetic surgery insurance,” indicates, there actually is an insurance products that will reimburse patients for their down payments (keeping in mind cosmetic surgery generally is an out-of-pocket expense for consumers) should Mother Nature or an airline mechanical issue stand between them and the operating suite.

That’s an interesting product but it also brings up the theme of cancellations in general, on which you might spin a story of how the stormy and icy weather affects small and service businesses, from hair salons and spas to massage therapists to medical, dental and optical practices and so on.  Are places that normally charge no-show fees cracking down, or forced to waive fees to keep customer goodwill as bad weather hits?  Or are consumers bundling up and making it to these discretionary appointments come hail or high water?  Worth a few calls to personal service providers to find out.

Airlines and travel

CNBC breaks down the $1.4 billion cost of the airline delays in just the first week in January; airlines are coming off strong 2013 revenue, analysts say, but the ongoing costs of a rough winter and several big waves of cancellations will sting.  It’s unclear if consumers will pay higher ticket prices in the coming year as airlines try to recoup those costs; past big storms haven’t automatically led to higher airfares.

However, consumer demand might push a variety of travel costs up.  Google searches on the term “warm weather vacations” were up during the Polar Vortex, ABC News reports. Travel ads to balmy have been popping up on my computer and tablet screens lately and I noticed a TV commercial over the weekend touting palm trees and sand. Perhaps those were normal planned winter marketing buys – or are resorts pushing more cruise and beach deals?  And what will consumers pay?  A widely cited Canadian report says resorts in balmy climes will be raising prices due to demand (and for Canadian consumers, due to the country’s weakening currency.

This is one time when the demise of the neighborhood travel agent is felt by reporters; you don’t have an easy go-to source who can tell you about demand for cruise and resort bookings is responding to the polar temps.  I haven’t found any good round-ups so you might have to do the phonework of calling cruise lines, airlines, resorts and online booking sites such as Orbitz yourself to find out about demand in your region.  Also try AAA, travel and hospitality trade associations and charter operators.

You might check in on airport operations, as well; this Star-Telegram report says an earlier January storm cost the Dallas-Fort Worth airport $2 million.


The propane shortage is making headlines and you’re probably on that.  Utility bills are filling consumers with dread this season, as USA Today reports bills in the hardest-hit areas may rise 25 percent or more as heating needs are pressured by relentless low temps.  Your local utilities can provide information about how average bills are trending and as the first of the month looms, you can get a good snapshot of January demand and its effect on households and businesses (remember some businesses can hedge or lock-in costs by buying energy on contract).

Let’s face it, if households are forking out several hundred dollars more than expected in winter heating bills, they aren’t spending that money elsewhere.  Talk with consumers about where they’ll be cutting back to make up for keeping warm.  Be on the alert for heating-related fraud, too, like this phishing scam reported by the Dayton Daily News.

What is the surge in demand doing for utility company stocks and profits in your area, as well?

CNN extreme weather photos
Much of the United States will see the coldest temperatures in almost 20 years, according to the National Weather Service.

Retail and restaurants.  

Next to Super Bowl organizer (ticket prices for the open-air game continue to plummet, according to ESPN, as the Feb. 2 forecast calls for sub-freezing temps) I think merchant might be one of the less desirable occupations this month.  Between computer hacking, public violence and shooting and now the frigid temps, it must be hard to lure shoppers.  “I’m only going out for the bare necessities,” is a frequent refrain in my neck of the woods, and perhaps yours.  This report from Westchester County in New York says “Weather puts chill on retail sales,” and you might want to check with your area’s Main Street merchants as well as the big box stores.

This Nashville Post report says the Cracker Barrel restaurant chain saw sales slump in late 2013 due to weather events; you have to wonder what the effect of the even-worse January weather has been on eateries.  At one local chain, I heard servers lamenting the dearth of tips this month as would-be customers stayed hunkered-down at home; the immediate loss of income like tips must have some ripple effect on servers’ spending and ability to pay bills.


The Associated General Contractors of America, a trade group, says winter weather may in part explain the loss of 16,000 construction jobs in December; continuing rough conditions don’t bode well for construction and skilled trades workers in January either.  Check with builders, unions and day-labor firms specializing in construction – as well as big-box materials suppliers – for reaction.


From salt to overtime pay, what will road commissions do to cover winter costs?  While not strictly a business story, financial costs will ripple out: Will contractors lose out on jobs this spring because the budget it tapped?  Mowing/landscaping of roads, litter and debris pickup, etc. may suffer according to reports.  Around my area, 70-80 percent of road commission budgets already used up and winter is only one-third over; officials are warning already of cutbacks to services and spending by the road authorities.

Who benefits?  

Car repair, towing, plowing, plumbing, delivery services  all are establishments that might be licking their chops over the deep freeze.  Remediation services that fix damaged dwellings and businesses after water-pipe breaks and other disasters also are worth a call.

USA Today just ran a piece about best airports for weather-delayed travelers, in terms of retail, eateries and other amenities.  You might check out who airport merchants fare; do they reap bonus revenue when flyers are forced to linger, or suffer a net loss due to all the canceled flights that keep patrons away from the airports?


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