As we lay to rest the ghosts and goblins of Halloween and finish up those last pieces of candy, all eyes turn to the fast-approaching 2010 holiday shopping season. Anyone that has been out shopping during the past week has noticed that retailers have swiftly loaded the shelves with holiday cards, Christmas lights, toys, etc. and the return of “Jingle Bells” to the store intercom system. If that is not enough to get you into the holiday spirit, perhaps the weather can help. Following the 2nd warmest September and October, collectively, in almost 20 years the beginning of November 2010 has brought many of us back to reality with the coldest start to November in 3 years for the nation as a whole. Same-store-sales for many retailers have been less than stellar during the mild Fall, so this change in the weather pattern is a welcome sight for the retail industry, especially for apparel and department stores who have struggled with excess inventories of coats, sweaters and fleece items. Retailers have reason to rejoice this holiday season as the weather looks like it will cooperate through the end of December 2010.
November 2009 was the warmest in 8 years and had the least snowfall in over 18 years nationally, which was an overall negative for cold weather seasonal items. Things are looking brighter for seasonal items this year as November 2010 promises to be much cooler and much snowier across a large portion of the country with the first week of the month already bringing colder weather and gains for retailers. The northern half of the continental U.S. will trend colder than last year with the greatest year-over-year change in the North Central states, including the Dakotas and Minnesota. Weather Trends International (WTI) expects snowfall to increase over last year in the colder, northern half of the country from the Rocky Mountains to the interior Northeast. Snowfall is projected to pick up in the mid to late part of November resulting in the snowiest November in 5 years. Colder and snowier weather, along with pent-up demand (thanks to the warmer start to Fall), will bring healthy gains for seasonal categories. Snowfall should not be too disruptive to store traffic as snow tends to melt quickly this time of year, so Black Friday Warriors fear not! The International Council of Shopping Centers (ICSC) forecasts gains of 3-4% for the retail industry and WTI projects results will beat or come in on the high-end of expectations given the favorable conditions for the month.
December 2009 was a memorable month for many as very cold, wet and snowy weather created obstacles for shoppers venturing to the malls. Cities like Dallas, TX; Asheville, NC; Richmond, VA and Philadelphia, PA saw a marked increase in snowfall with many of these locations nearing or exceeding average snowfall for an entire season in December alone. This year retailers and shoppers alike can look forward to a less difficult December 2010 as snowfall trends the least in 4 years and temperatures trend the warmest in 4 years. The Rocky Mountains, mountains of the Northeast and downwind of the Great Lakes will be the best bet for those dreaming of a white Christmas as snowfall will be the greatest in these areas. WTI research shows that less snowfall and warmer temperatures in December helps to boost overall retail sales. Non seasonal gift categories, like jewelry and electronics, will benefit from warmer and drier weather, but at the expense of cold weather categories. Store traffic will also reap the benefits of less snow this year as shoppers will have an easier time getting to the stores and less will have to resort to shopping online. The negatives for the month will be difficult comparisons to last year, when same-store-sales rose +3.6%, and less favorable conditions for cold weather categories. ICSC expects that the holiday season overall, which includes November and December 2010 collectively, will come in at 3-4% and WTI projects sales will be in-line or on the high-end of expectations.
October’s muted sales results will mean heavier discounting early on this holiday season which will be a boon for savvy shoppers. Timing promotions to coincide with favorable weather will be an effective strategy for retailers to overcome the negatives of heavy discounting, especially for cold weather categories which will see a decrease in demand during December. High unemployment and difficult comparisons to last year will dampen overall retail results, but factoring the weather into retailers’ plans should subdue these negatives. Effective planning of promotions and less obstacles for shoppers in December will insure that retailers’ cash registers jingle all the way through the end of December.
###
About Weather Trends International: The global leader of actionable year-ahead business weather guidance for retailers, manufacturers, pharmaceutical companies, agricultural firms, financial equity and commodity analysts. Clients include some of the world’s most respected and successful companies like Wal-Mart, ASDA, Target, Kohl’s, AutoZone, Sherwin-Williams, Anheuser-Busch, Johnson & Johnson, 3M, SC Johnson, JP Morgan, Agway, Hershey’s and over a hundred fifty others. Its business centric weather solutions and understanding of how consumers respond to the weather is used throughout organizations to help "manage the weather risk”. Utilizing technology first developed in the early 1990s, Weather Trends International’s unique statistical math based trade secret formula forecasting methodology projects temperature, precipitation and snowfall trends by day and week a year-ahead for 720,000 locations across the globe (all 195 countries) with an industry leading 75% to 95% accuracy. WTI is recipient of 6 business/technology awards this year: 2009 winner of the Red Herring North America technology award, 2009 winner of the American Business Award for Most Innovative Company of the Year, International Business Award for Most Innovative Company of the Year in North America and Forbes #5 Most Promising Company of the year. Offices in Bethlehem, PA, and Bentonville, AR. Visit http://www.wxtrends.com/ or http://www.myskeye.com/ for more information.
