Weather Trends International December 2009 Retail Sales & Weather Round-up

U.S. DECEMBER 2009 SUMMARY:  There were more positives than negatives in December despite another stormy month.  The biggest positive was snowfall down 41% from a year ago for the 14 days prior to Christmas with 12 of 14 days trending much less snowy than a year ago.  After an extremely warm November, the major cold snap around Hanukkah (see Daily National Summary Chart ) was a plus for Winter seasonal merchandise that mounted in November.  The milder temperatures leading up to Christmas were also a positive for store traffic and gift sales.  The statistically most important metric for retail industry sales is the consumer confidence index which shows a 76% correlation.  The index (53) was up this year vs an all time low last year (38) which is a positive for higher year-on-year sales.  The final positive is the very easy sales comparisons to the past two Decembers which were in negative territory for the industry (-0.7% in 2007 and -4.6% in 2008).  A negative factor was gasoline prices up +60% over last year, but historically gasoline prices do not show much relationship to overall retail industry same-store-sales.  That said, overall retail industry performance is likely to be in positive territory when results are announced Thursday.

The U.S. Regional Chart summarizes the regional trends across the U.S.  The extremely wet weather, especially in the South and East, was a plus for Mall based stores and Discounters with more seasonal merchandise.  On-line sales also do exceptionally well with more inclement weather so retailers with a stronger on-line presence can weather the storm better.

G-20 DECEMBER 2009 SUMMARY:  It was the coldest December in 7 years making it the coldest YEAR for the globe in 13 years (1996). Global temperatures this year have declined for the 3rd straight year due in large part to the commencement of the 32-year cold ocean phase (PDO) in the Pacific.  The warm phase of the Pacific went from 1975 to 2006 so it’s not surprising the planet warmed during that period but has since been showing cooling trends since 1998 (warmest year in the past 114).

 It’s not surprising that snowfall is also widespread for the 3rd straight year as well with record breaking snowfall in parts of the U.S., South Korea (most in 70 years) and China most in 60 years.  Canada actually had the most improved conditions with a significantly warmer month than last year’s record breaking cold along with the driest conditions in 7 years – a plus for footfall and retail sales (see global year-on-year temperature and precipitation maps for the 5-week retail December 2009 vs 2008).