Winter economic slowdown? Not for Campbell's soup

This snowman is confused.

Nasty winter weather is largely bad for the economy. Freezing weather means smaller paychecks for part-time workers, fewer customers in stores and delays in shipping and manufacturing. But there are a handful of industries that actually thrive in brutal weather, though cashing in can be tricky.

Campbell's Soup stock soared Friday on better than expected earnings, driven in part by surging soup sales.

"In the southeast region, on-demand usage increased by more than 30 percent," says Todd Smith, spokesman for cable company Cox Communications.

The hope for Cox and other media companies is people stuck at home might get turned on to faster broadband, premium channels, or streaming video service.

At some point, people must leave the comfort of warm soup and abundant television to brave the icy outside world. They'll have to go shopping for coats, gloves, and boots.

"We could have sold a lot more if some of the suppliers actually had more," says Dave's New York president Bob Levy. His stores sell winter clothing and sales are up about 10 percent.

And yet, Levy says his store can't order enough. That's because today's manufacturers are built extra-lean, in order to keep expenses down. That means many don't have extra workers or materials sitting around if they need to make more boots.

"You realize you don't have leather, you don't have the sole, you don't have all the components," explains Harvard Business School logistics professor Ananth Raman. "And you don't also have factories that are sitting ready to go."

That means additional boots may not be ready before spring, too late to turn snowfall into windfall.

Mark Garrison: Of course snowplow drivers make a killing, but many others profit from storms, including giant corporations. Campbell’s stock soared Friday on better than expected earnings, driven in part by surging soup sales. And while folks spoon their Chicken & Stars, they’re streaming a lot of video, says Todd Smith of cable company Cox Communications.

Todd Smith: In the southeast region, on-demand usage increased by more than 30 percent.

The hope for Cox and other media companies is people stuck at home might get turned on to faster broadband or premium channels. Now, at some point, people must brave the icy outside world. They’ll have to go shopping for serious coats, gloves and boots, like in this guy’s store.

Bob Levy: It’s been great, can’t complain at all.

Bob Levy is president of Dave’s New York, an outerwear store that loves a strong winter. Sales are up about 10 percent, but he says the company might have doubled that increase.

Levy: We could have sold a lot more if some of the suppliers actually had more.

Like a lot of retailers in the northeast, his customers need new boots for their frozen toes. But he can’t get enough. That’s because today’s manufacturers are built extra lean to keep expenses down. Harvard Business School logistics professor Ananth Raman says that means many don’t have extra workers or materials sitting around if they need to make more boots.

Ananth Raman: You realize you don’t have leather, you don’t have the sole, you don’t have all the components. And you don’t also have factories that are sitting ready to go.

And those boots may not be ready before spring, too late to turn snowfall into windfall. In New York, I'm Mark Garrison, for Marketplace.

About the author

Mark Garrison is a reporter for Marketplace and substitute host for the Marketplace Morning Report, based in New York.

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