News / Business
January 2011 Retail Business Weather Round-Up
Greater snowfall than last year and normal gave retailers plenty to contend with this month. With winter storms occurring weekly in the heavily populated East, millions of consumers were stuck at home until the inclement weather passed. Fortunately, the disruptive snow was confined primarily to the middle of the week with the weekends remaining fairly dry. The negatives of the storms were amplified by a traditionally low-volume month with discretionary spending taking a hit. However, must-have winter categories like pantry loading food, shovels, ice melt, bird seed and fire logs were the big winners this month, as well as winter clearance. The Southwest was the bright spot this month as milder and drier weather during the 2nd half of the month helped to get consumer's thinking about Spring, getting the early seasonal categories off to a healthy start. Flu activity neared it's peak with 50% of states reporting widespread flu cases (see map below). Drug stores benefit from a rise in flu cases, although store traffic at other retailers may have taken a slight hit from the increase in the flu. Gas prices dropped slightly following 8 weeks of increases, a minor positive for discretionary spending. Despite the unfavorable weather this month, same-store-sales came in at +4.8% surprising most analysts, but may be a hint of higher consumer confidence as the economy continues to recover.
U.K. JANUARY 2011 SUMMARY: January trended warmer than last year, however, temperatures were below normal as this was the 5th coldest retail January in 18+ years. Snowfall was much less than last year, a huge positive for gains in year-over-year footfall, especially since the entire country was covered in snow last year. A more typical U.K. winter pattern took shape at the start of the month with mild, wet and windy conditions, although there were some wintry showers in Northern Ireland and parts of Scotland. Heavy rain and gales made travel difficult during week 2 with floods causing the closure of several roads and railways. Following a very mild week 2, colder weather returned during week 3 along with much more settled conditions. Temperatures fluctuated through the rest of the month with interludes of warmer/wetter weather and colder/drier weather.
Weather was an overall positive for retailers this month with milder temperatures and much less snowfall. Wetter weather at the beginning of the month may have had a dampening effect on footfall, but settled weather at the end of the month was a positive for footfall. Rain gear including rain slickers, wellies and wiper blades should have seen an uptick in demand during the 1st part of the month, as well as clean-up supplies in parts of Wales and northern England where flooding occurred. Meanwhile, milder weather got consumers thinking about Spring, a positive for early seasonal categories. Colder weather at the end of the month benefited categories like fire logs, pantry loading foods and winter clearance. While weather was a positive for retail sales, retailers still had to contend with low consumer confidence due, in large part, to decreased government spending, and less discretionary income as an increase in VAT was instated.
G-20 JANUARY 2011 SUMMARY: G-20 January temperatures trended warmer than last year and precipitation trended drier than last year. The story that grasped all the headlines this month was the extreme flooding in Australia's northeastern state of Queensland. Brisbane, Australia's 3rd largest city, was directly affected by the flooding with thousands of homes and business destroyed. Flooding also impacted Brazil resulting in the deadliest disaster in Brazil's history. Parts of the Philippines, Sri Lanka, and South Africa were also impacted by flooding. Elsewhere, not enough rain caused problems in eastern Africa where an ongoing drought continued to take it's toll on food supplies. Freezing temperatures in India, Bangladesh and southern China brought some businesses to a halt, especially in China as wintry precipitation moved in just as an estimated 230 million people took to the roads for the Lunar New Year, the largest annual human migration in the world! Thousands of people were forced to abandon cars on highways as roadways became impassable. See G-20 January 2011 Precipitation Map.
The flooding in Queensland had a huge impact on the overall economy of Australia with clean-up and rebuilding costs estimated to top 30 billion Australian dollars. Over 75% of coal-producing operations were shut down, which had impacts worldwide as Queensland supplies just under half of the world's coking coal. Flooding in South Africa affected the soybean and sunflower harvests and damages are estimated to top 280 million U.S. dollars. Freezing temperatures and wintry precipitation in southern China destroyed approximately 350,000 acres of crops, including cabbage and rice. Economic losses are expected to be in the 200 million U.S. dollar range. Meanwhile, much warmer yr/yr weather was a positive for store traffic and retail sales in Europe and Russia, while colder weather in Canada supported cold weather seasonal categories.
U.S. JANUARY 2011 BUSINESS WEATHER REPORT
U.K. JANUARY 2011 BUSINESS WEATHER REPORT
G-20 JANUARY 2011 BUSINESS WEATHER REPORT
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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, 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 and check out our new consumer website Weather Trends 360 to see your local year-ahead weather forecast.
