The recent destruction of Hurricane Irene on the East Coast left many Americans underwhelmed. The carnage and destruction of Hurricane Katrina were not as present for Irene, but billions of dollars worth of damage and flooding are still wreaking havoc on the eastern seaboard. In the already sluggish economy, Irene is hitting the pocketbooks of most Americans in a serious way.
The event was downgraded from a hurricane to a tropical storm, but because of the lack of emergency infrastructure, damage was more widespread and costly than if a more devastating hurricane were to hit a prepared Florida coast. If the storm became any stronger, it could have caused serious damage to all of the glass in the Manhattan skyscrapers or cause permanent damage to all of the towns by rivers and ponds in Vermont.
Many retailers and businesses were relying on decision analytics and a busy back to school weekend in order to optimize sales. For operations such as grocery, drug, and home improvement stores; the weekend was a huge success because of the need to stock up on emergency supplies. For outlets like department stores, clothing chains, and movie theaters; the weekend was a bust because of evacuations and the fear of leaving shelter. A family was more likely to purchase something like a power generator or an emergency supply of freeze dried food rather than a new wardrobe to show off at college.
In an AP article, market researcher Ken Perkins said that the $300-500 people spend on fixing their homes would be lost to discretionary spending and could be taken back from the back to school business. With the economy already in a bad state of being, it will be even harder for most retailers to recover from missing the second biggest shopping season of the year.
For those with hurricane insurance, there claims might not cover all of the damages incurred by the storm. As reported by The Christian Science Monitor, most Americans do not participate in the National Flood Insurance Program. Since most of the damage caused by Irene was through flooding and not wind, people will find a hard time getting compensation for damaged goods and property.
While the immediate impact of Hurricane Irene may seem less severe than other highly publicized natural disasters of the past; its effects will linger through the economy and infrastructure of the area for years to come.