U.S. Consumers Could Feel Heat from Higher Fuel Costs

Higher home heating prices could be another deterrent to U.S. consumers shopping this holiday season. “As if retailers did not have enough to worry about, just as the holiday season rolls around, most consumers will find a new sticker shock in their heating bills,” Gary Balter, research analyst at Credit Suisse.

He said:

 

Although it is August and heating bills may not be top of mind, we believe this is an incremental consumer headwind to consider over the next several months.

 

Current forecasts estimate price increases of roughly 31% for heating oil and 22% for natural gas this winter. The Northeast and Midwest will bear the greatest burden of higher heating costs, Mr. Balter noted.

That said, based on geographic exposure, certain retailers will feel a more negative impact of higher heating costs, he said. Those include: sporting goods retailer Cabela’s Inc. (CAB) and Dick's Sporting Goods (DKS); department stores Kohl's Corp. (KSS) and Bon-Ton Stores, Inc. (BONT); office supplies retailer Staples, Inc.; drug store chain Rite Aid Corp. (RAD) rand clothing retailers Jones Apparel Group, Inc. (JNY) and Under Armor, Inc. (UA).  Others are more protected based on the same geographic rationale, he said, including Dillard's, Inc.(DDS), Family Dollar Stores, Inc. (FDO), Wal-Mart Stores, Inc.(WMT), Walgreen Co. (WAG), The Kroger Co.(KR), Safeway Inc.(SWY), Whole Foods Market, Inc.(WFMI), Sonic Corp.(SONC), The Cheesecake Factory Inc.(CAKE), Nike Inc. (NKE), and Polo Ralph Lauren Corp. (RL).

Comments

[econprof:]

FDO Family Dollar doesnt anyone ' get it ' ? They have been around 49 years , ZERO debt , 6500+ stores and ALWAYS ALWAYS have increased prfits in middling to declining economic periods Such as the current economy, Hello.
Another great strength to this company is the fact that they cater to a very large economic base in theis country that doesnt change with the increasing economic growth ; it is the lower middle class and lower class whom remina typically stable - - it is the retailers that thrive on and cater to the upper middle class and upper class that I would avoid like the plague itslef currently.
FDO shares have been very strong relative to other retailer shares as well as the market as a whole the past handful of days - no coincedence that their quarter just ended this weekend////////

2008 Sep 01 01:46 AM

[Humidifier ...:]

where you inspect your house for drafts, correct insulation levels and heating unit filters.Humidifier Filters

2008 Oct 23 10:01 AM

[OctoberFaith:]

oh.
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thanx econ prof.
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I like your teaching methods.

2008 Oct 25 05:27 PM