The Commerce Department released its advanced monthly retail sales for January 2023 with overall sales rising 3% compared to December 2022 and outpacing inflation.
“Advanced retail sales for the month increased 3%, compared with expectations for a rise of 1.9%,” reported CNBC.
Planalytics’ Weather-Driven Demand (WDD) retail traffic indices for the month were generally positive, highlighting how a lack of traffic-limiting wintry weather conditions and mild temperatures helped sales in many retail segments. The nation as a whole logged its warmest January since 2006 for the nation with the Northeast recording its warmest first month in over 60 years. The Eastern North Central and South Central regions were warmest since 2006. Cooler conditions were focused in the Southwest.
From a year-over-year retail comp perspective, the warmer variance in the eastern half of the country stands out (see map below) and WDD comparisons to January 2022 quantify the traffic and sales impacts.
In the South Central region, the mild conditions spurred early spring season sales at home centers, with many outdoor and lawn categories showing 15-35% WDD gains versus the prior year. In the Southeast these same categories saw also saw a nice weather boost with 10-20% WDD compared to January 2022.
As another example, Planalytics calculated the overall sales impact at restaurants, confirming that in many highly populated eastern markets, consumers were out and about and spending. Planalytics estimated that, for the U.S. overall, $376 million of additional sales versus the prior year could be directly attributed to more favorable weather.
On the other hand, the warmer eastern markets have made it more difficult for clear winter season apparel at department stores and clothing chains. Planalytics calculated negative WDDs (down 10-30% vs. last year) of coats, boots, and winter accessories categories. These same retailers will likely have less to markdown in some western markets, where temperatures trended cooler to 2022. These same categories in the Southwest saw WDD gains of 5-15% year-over-year.
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