The impact of severe weather events on local businesses. A special report by Womply Research.

Header image of extreme weather photos

Every year it seems as if we can count on this year being “one of the worst on record” for wildfires, hurricanes, and just about any other type of extreme weather event imaginable. And while there’s clear, mounting evidence that extreme weather events are growing more damaging and more frequent, 2020 presents a particularly difficult challenge.

Local economies already reeling from the effects of the coronavirus pandemic are bracing for upcoming extreme weather seasons. With millions of local businesses already struggling to survive, we wanted to take a closer look at how local businesses are impacted by extreme weather events.

The Womply research team examined credit card transaction data in zip codes affected by major wildfires, hurricanes, floods, and winter storms.

We then identified the date each extreme weather event began (when a hurricane made landfall, when a wildfire began, etc.), and crunched the numbers to determine the following:


  • How many businesses shut down due to the extreme weather events?
    • We identified the number of businesses that stopped transacting entirely during the extreme weather event, and didn’t transact again within 90 days after the event (this would not capture any business that temporarily closed and then opened back up again.)
  • How much was revenue impacted during the extreme weather events in our analysis?
    • We identified typical seasonal revenue trends nationwide in each industry, and compared the revenue at businesses in our analysis to see if (and by how much) revenue fell above or below the expected seasonal range in the days immediately prior and following the extreme weather event.

Comparing the impact of different extreme weather events on certain types of local businesses.


Hurricanes, wildfires, winter storms, and major floods are all extremely destructive events, but they affect local communities and businesses differently. We wanted to see how each event affected specific types of local businesses, and how they compared and contrasted.

We’ll start with a “zoomed out” view first, then drill down into a more detailed view.

How many businesses closed due to different extreme weather events?


Whether it’s due to physical/structural damages, or deep financial losses, some businesses are hit so hard by extreme weather events that they never fully recover.

In order to determine how many businesses may have shut down due to a severe weather event, we identified how many businesses stopped transacting entirely during the extreme weather event, and didn’t process another transaction again for at least 90 days after the event.

Wildfires and hurricanes were the most damaging categories of extreme weather events overall, with 7.6% of local businesses across all categories in our analysis closing due to those events.

During wildfires and hurricanes, it was businesses in the dining, food, and beverage industry that were hit hardest.

5.9% of all local businesses closed due to floods, edging out winter storms at 5.0%. When you compare this to the revenue figures in the section below, it shows that if a local business is fortunate enough to be able to stay open for business during a major flood, they see little financial impact. If a business is physically impacted by a flood, however, the results can be catastrophic.

Dig deeper: The impact of individual weather events on local businesses:

How much was average revenue at local businesses impacted during extreme weather events?


Our analysis identified when, after the beginning of an extreme weather event, average revenue at open businesses deviated from what was otherwise expected.

The table below shows how much revenue was impacted (negatively or positively) on average throughout the affected period.

An important note: these figures represent average revenue at businesses that were able to remain open and transacting.

Impact on revenue
Length of impact

Change in revenue during and immediately after the weather event vs. typical seasonal averages

Number of days revenue was above or below seasonal expectations during and after the weather event

As you can see, winter storms were the most consistently damaging to local businesses, although for relatively shorter periods of time.

Hurricanes and wildfires had major negative impacts on some types of businesses (like retail shops, auto services, and health and beauty businesses), but actually resulted in increases in revenue for some types of businesses that were able to remain open (lodging places, as an example, may have seen business rise as displaced persons looked for temporary living arrangements).

Interestingly, floods appeared to have little to no negative impact on the local businesses in our analysis. This is likely because businesses who were able to remain open and transacting during a flood weren’t located in the immediate “flooding zone,” but rather fell in less impacted area of the zip code we analyzed.

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More details by industry type


Select an industry in the table below to see more details on the impact of different weather events on that industry:

Details by industry type
Arts And Entertainment
Auto Services
Bars And Lounges
Food And Beverage Shops
Health And Beauty
Local Services
Lodging Places
Pet Services
Quick Serve Food And Beverage
Restaurants
Retail And Wholesale
Sports And Recreation Places
Details by type of weather event
Floods
Hurricanes
Wildfires
Winter Storm

Timeline: how long did it take for local business revenue to return to normal after an extreme weather event?


Now, let’s take a closer look at how much revenue was impacted during extreme weather events, and how long it took for revenue to get back to “normal.”

Select a small business industry type in the chart below to compare the impact of different extreme weather events.

Select an industry

Arts And Entertainment
Auto Services
Bars And Lounges
Food And Beverage Shops
Health And Beauty
Local Services
Lodging Places
Pet Services
Quick Serve Food And Beverage
Restaurants
Retail And Wholesale
Sports And Recreation Places

Select an extreme weather event in the chart below to compare its impact on different types of small businesses.

Select a weather event

Floods
Hurricanes
Wildfires
Winter Storm

Dig deeper: The impact of individual weather events on local businesses:

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