News / Business
Weather Trends International June 2009 Global Retail Weather Round-Up
For the United States as a whole it was the coldest June in 5 years with 67% of the U.S. trending colder than last year. However, it was a tale of two halves with the coldest first 2 weeks of June in 11 years followed by the warmest last two weeks of June in 7 years with an exceptional Father’s Day period. The week of July 4th was the driest in 7 years, another plus for outdoor seasonal items and food categories.
While national rainfall was relatively flat to last year, it was excessively wet in the Northeast (3rd wettest in 17+ years) and the Southwest (2nd wettest in 17+ years). The Northeast was by far the worst region with temperatures the 2nd coldest of the past 17 years. The Pacific Northwest showed the greatest change toward much warmer weather with the warmest June in more than 17 years, a big plus for seasonal category sales. While a scorching heat-wave impacted the South mid to late month, it was only slightly warmer than the year-prior. SEE ATTACHED REGIONAL SUMMARY CHART
Unfortunately the negatives outweighed the positives for retail industry same-store sales which were the worst in decades at -5.1% according to data from the International Council of Shopping Centers (ICSC). Recall that last year June brought the strongest same-store sales gains in all of 2008 due in part to favorable weather and government rebate checks. The weather this year was certainly a negative for the country as a whole – especially the Northeast. The positives were gasoline prices trending down 36.5% vs last year and lower home cooling bills for the northern quarter of the country and Southwest. A recent ICSC survey found that 60% of higher income families are further reducing debt and spending.
G-20 SUMMARY: On a global scale it was the coldest June in 5 years as well, especially across North America, Eastern Europe, Southern Russia and Australia. This would suppress demand for hot weather items in the northern hemisphere regions, but a plus for Winter seasonal items in Australia. The heat was most excessive in India where drought was extreme with the driest June in India in over 20 years.
The cooler global trends were the result of 4 large scale features:
1. Pacific Decadal Oscillation (PDO) Cycle, 32-year cold phase of the Pacific Ocean started 2 years ago and continues for the next 30 years. It will be interrupted by a developing El Nino (warmer ocean in the tropical Pacific) this year and early next year which could lead to a warmer 2010 here in the U.S.
2. Atlantic Ocean Multi-decadal Oscillation (AMO) Cycle, the 20-year cold phase of the Atlantic Ocean started this year – several years earlier than normal. Colder Atlantic Ocean = colder planet.
3. Very long solar minimum cycle that is now the longest 100 to 300 years. Weak sun = less solar radiation (heat) here on Earth = cooler planet.
4. Eruption of Russian volcano Sayrchev Peak on June 12th. Large volcanic eruptions spew massive amounts of SO2 (sulfur dioxide) into the upper atmosphere which actually reflects incoming solar radiation. Since this volcano was in the Northern Hemisphere it can have an even greater impact on our temperatures (cooler).
The official global temperature anomaly from the University of Alabama showed a dramatic warming trend from the 1970s to 1998 which corresponded to the warm phases of the PDO and AMO ocean cycles. Since both have flipped cold in the past two years a more dramatic cooling trend has developed that is getting little media attention. While the globe was cooler, some areas such as India and the UK had scorching heat-waves.
U.K. SUMMARY: The retail month (31 May-4 July) trended warmer than last year and warmer than normal for the UK as a whole. It was the warmest retail June in 6 years. The month started out with the first two weeks trending cooler than last year with the second week being the coldest in 10 years. However, by the third week temperatures began trending upwards, which resulted in a heat wave by the final week of the retail June. It was the warmest final week of a retail June in 17+ years.
Precipitation was up 15% over last year and 10% above normal. The second week of the retail June was the wettest of the month with the rest of the weeks generally trending drier than last year.
The month started out dismal for sales with colder and wetter year-on-year conditions. However, a boost in sales and footfall occurred around the third week as the weather began trending warmer and drier than last year. By the fourth and fifth week, sales on summer seasonal items should have spiked as a heat wave settled in over a good portion of the UK. Stock outs were likely widespread on items that were recently slow to leave the shelves like fans, summer apparel, beverage categories and other hot seasonal items. Like-for-like sales gains should improve for the month due to the warmer and drier year-on-year weather of the last three weeks of the retail June.
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