NEW YORK -- If worries about Ebola continue to spread, more U.S. consumers may decide to skip the mall altogether and do more of their holiday shopping online this year.
Internet shopping already is grabbing a bigger share of overall retail sales. According to Census Bureau data, e-commerce sales rose 4.9% in the second quarter from the first-quarter, more than double the 2.3% increase for all retail sales. E-commerce sales also were up 15.7% when compared with a year earlier and accounted for 6.4% of total retail sales.
Growing worries in the U.S. about Ebola and the possibility of travel restrictions could stifle traditional holiday shopping such as long lines on Black Friday. That would then weigh on sales at brick and mortar stores, and push demand onto online stores and mobile apps.
So far retailers haven't changed their plans, but they're keeping watch.
In a phone interview with TheStreet, a Target spokesperson said it's "monitoring" the Ebola situation very closely. He said the retailer has not felt a financial hit since the first case of Ebola was diagnosed in the U.S. last month, and that the company "plans its inventory conservatively."
When reached for comment via email, a spokeswoman at Gap said on the topic of Ebola uprooting its holiday season planning, "We haven't heard anything on that front. Of course, we always think about the safety of our customers and employees in these situations and follow guidance and precautions" from the Centers for Disease Control.
A source at a transportation company, choosing to stay anonymous, said the thought of an online sales surge due to the Ebola scare has not caused the addition of more employees in preparation.
But some investors may already be positioning for profit-busting excess inventory at global brick and mortar retailers caused by slow traffic to their malls and outlets, no doubt tied to Ebola. Shares of the SPDR S&P Retail ETF and Consumer Discretionary Select SPDR ETF have shed 6.7% and 7.67%, respectively, in the past month. Each exchange-traded fund has underperformed the Dow Jones Industrial Average and S&P 500 during that span.
The SARS epidemic of 2003 does offer a few clues on the financial ramifications to both online and brick and mortar retailers, such as an Amazon and Walmart , should the Ebola scare get out of control. According to a new report out of investment bank Deutsche Bank, SARS infected 8,098 people, killed 774, and spread to 29 countries. The impact was most acute in China (which was the source), spreading to Hong Kong, Taiwan, Singapore and eventually, Toronto.
The report points out that SARS cost East Asian countries about $20 billion, citing World Health Organization data, while the U.S. felt a $7 billion economic dent as travel and lodging plans were derailed.
Even the Federal Reserve, then led by Alan Greenspan, mentioned SARS. "San Francisco noted that international travel had weakened, due in part to the SARS outbreak in Asia, and Dallas observed a decline in air travel due to the onset of the war and the SARS outbreak," said in a Beige Book report issued in April 2003.
From February 2003, when the first case of SARS was reported, to March 1 the Dow Jones Industrial Average and S&P 500 fell 4.8% and 2.2%, respectively. The indices bottomed in early March of 2003, in spite of SARS cases being stopped in July.
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