Tag Archives: weather trends

Warm June Boosts Sales of Seasonal Goods and Increases Participation in Outdoor Activities

June is the first month of the summer, and apparel retailers, hardware stores, restaurants, golf courses, and many other businesses hope for favorable weather to generate big sales. In addition, Father’s Day sales, which reached $14.3 billion this year according to the NRF, are also impacted by the weather. So what did the weather look like in June for the various regions of the country, and what did this mean for apparel retailers, hardware stores, and other businesses looking for big sales to carry over into the rest of summer? Here are several points of note that were published in our June WeatherCall report. You can download the complete report here.

 

It Was a Hot and Dry June

 

June 2016 was one of the warmest on record. The first week of June was the warmest in the United States in more than 55 years boosted by near-record highs in New England and the Pacific. This carried over into the second week of June where St. Louis experienced its warmest temperatures for the week since before 1960. The West North Central Region also trended warmest since 1987. The East South Central region recorded a top 3 warmest second week in June in over 55 years.

 

The third week of June nationally was the second warmest in over 55 years. This was driven by near-record highs in the Mountain and Pacific regions. Finally, the fourth and final week of July was the warmest nationally in three years. LA experienced its warmest temperatures for the week since 1976.  There were a few regions that did experience cooler overall temperatures than in years’ past, but, as a whole, June was very warm when compared to prior years.

 

It was also relatively dry in much of the United States. New England had its driest June since 2007. The East South Central Region was its driest since 2011. The Mid-Atlantic, East North Central, and Mountain regions experienced their lowest precipitation levels since 2012. Major cities in these regions, including New York City, Boston, Cincinnati, St. Louis, and Buffalo all had drier than normal conditions throughout the month of June. Overall, rainfall was the least since 2012.

 

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The weather left no doubt in the minds of consumers about the arrival of summer. They responded in kind by purchasing a variety of seasonal goods. Air conditioner weather driven demand (WDD) was up 33%. Sun care products were up 9%. Shorts were up 5%. In addition, retail traffic was up in several segments, including restaurants, sporting goods, home centers, and more. Not surprisingly, the indoor entertainment industry experienced less foot traffic than in year’s past.

 

Overall, Planalytics’ weather-driven demand analytics calculated a significant weather impact on sales in June 2016 alone compared to the same period last year:

  • Apparel Chains: $249,000,000
  • Hardware & DIY: $65,000,000
  • Restaurants: $554,000,000

 

June 2016 Was a Warm One. That Doesn’t Mean June 2017 Will Be Warm as Well

 

June 2016 saw mostly favorable weather, which helped many businesses see increased sales from consumers taking advantage of the favorable conditions. However, June 2017 could be a completely different story. Weather only repeats itself about 15-20% of the time. Rather than wait and see what happens, businesses do have the opportunity to invest in weather risk management, which can help minimize adverse effects from the weather and maximize on weather-related opportunities. Contact us today to speak with a Planalytics representative and learn more about the benefits of using our weather analytics services.

 

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What Will an Early Easter Mean for Retailers?

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What does an earlier Easter weekend mean for retailers? That question depends on the weather conditions in a particular location. Spring weather around the Easter holiday often shifts the drivers for spring product categories such as apparel, home goods, sporting goods, and leisure activities. As the time of year changes, so do the drivers for demand of specific products.

When you think of Easter Sunday, what style of clothing comes to mind? For many, a picturesque Easter includes sun dresses, short sleeve shirts, shorts, and sandals. Typically, the parkas, hats, gloves, and other mainstays of winter are packed away around this time of year.

But an earlier Easter could present more risk for retailers as cooler weather could damped demand for seasonal items. The Easter holiday in 2016 will take place on March 27, which is earlier than most years where it occurs in the first or second weekend of April. Conversely, a warmer Easter holiday in March could mean increased sales for retailers, restaurants, movie theaters, and jumpstart the spring shopping season.

So what should Easter weekend look like for retailers across the country? Planalytics identifies the weather impact for leading retailers and retail suppliers.

The weather-driven demand for the week ending 3/26 for a few products are:

Shorts +5

Short Sleeve Shirts +5

Sandals +3

Retail Traffic +1.5

Easter Outlook; The East will warm with potential showers on Easter Sunday. Rain and thunderstorms threaten holiday festivities across the central and southeastern U.S. California will be warm and dry.

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A Final Look at December Retail Sales and Why Retailers Can’t Wait for Spring

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If retailers have a vested interest in whether or not Punxsutawney Phil sees his shadow or not, you can’t blame them. According to recently released data from the National Retail Federation, retail sales in the months of November and December only rose 3%. Before the holiday season started, it forecasted 3.7% growth. Specialty apparel stores were among those hit the hardest, losing close to $600 million in revenue over the course of the season. Department stores and other major stores were not included in this number.

In a Fortune.com article detailing holiday season results on major retailers in the country, many stores suffered setbacks in holiday sales. Macy’s, for example, took a 5.2% loss in comparable sales. Gap and Best Buy also experienced a significant loss in sales compared to other years, forcing them to reassess their operations and marketing plans in the next quarter. So the question then becomes how did this happen? According to the National Retail Federation, there were several factors in play.

 

Warm Weather, Early Promotions, and More Online Spending

 

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In his assessment of the holiday seasons sales report, NRF President Matthew Shay said the following: “Make no mistake about it, this was a tough holiday season for the industry. Weather, inventory challenges, advances in consumer technology and the deep discounts that started earlier in the season and that have carried into January presented stiff headwinds.”

In many areas in the country the weather was warmer this holiday season than ever before. In the Democratic Presidential Primary Debate, Bernie Sanders even remarked how it was significantly warmer in Burlington, Vermont than it had ever been before. He is not wrong. The second, third, and fourth weeks of December were the warmest in over 55 years for the New England region, while the Mid-Atlantic, East North Central, and West South Central regions all had 2 out of the 5 weeks trend warmest in 55+ years. Macy’s attributed 80% of its holiday sale losses to the weather. The Burlington Coat Factory experienced poor winter clothing sales and is now only showing figures that exclude its coat sales.

Because of this clothing retailers will need to heavily discount their winter clothing to make up sales and reduce inventory. Although Old Man Winter has recently made his presence known in New England and the Mid-Atlantic, retailers are gearing up their spring inventory planning. Spring inventory is typically seen in February and March. Therefore, they must discount their winter inventory to make room for spring items.

In addition to the weather, early promotions and consumer shopping behavior all impacted sales. Many shoppers stayed at home and shopped online or shopped early when they saw heavily discounted items. These discounts had a great impact on margins, which hurt sales for retailers even further.

 

What Lesson Should Retailers Learn from This Holiday Season?

 

In short, retailers who experienced losses during the holiday season will have to take better care to use weather analytics to determine how weather affects their sales. While retailers eventually caught on and responded accordingly with sharp discounts and other promotions to encourage people in the doors, the damage was already done. The fact that some companies attribute weather as 80% of the reason why they lost sales shows the importance of weather trends in future strategic plans.

 

 

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