Posted by Bill Kirk, CEO

Globally- it was a frigid January with the coldest and snowiest conditions in decades for much of the U.K., Europe, Russia, Northern China and the Southern U.S. which is a big negative for overall retail sales performance.  

Historically a warmer, drier and less snowy January results in +5% higher retail industry same-store sales (SSS) gains compared to a cold and snowy month.

Here in North America the pattern was up-side-down with Canada having the 2^nd warmest January in two decades with snowfall across the country down -47% vs. a year ago while the Deep South of the U.S. had snowfall up +161% in the Southeast over last year (most in 14 years), up +188% in the South Central U.S. (most in 13 years) and up +331% in the Southwest (most in 5 years).  The late month Deep South snow storm resulted in U.S. snow cover reaching 70% of the U.S. blanketed in some snow – something that hasn’t occurred in decades.  Across the Southern U.S. temperatures were also the coldest in 9 years with record breaking freezes as far south as Florida driving triple digit sales gains for Winter merchandise.  CLICK ON CHART FOR LARGER VIEW

Across the northern U.S. it wasn’t quite as bad with the Pacific Northwest having the warmest January in over 18 years and snowfall down a whopping -83% the least in 16 years (very favorable for retail store traffic).  Even in the North Central U.S. and Northeast snowfall was down -39% and -34% respectively with 5°F warmer conditions than a year ago (a significant change on a monthly level). 

Nationally, snowfall was down -22% vs. a year ago January (9^th snowiest of the past 17 years) and -6% below average.   These milder and less snowy trends across the Northern U.S. were certainly a plus for overall retail industry SSS and while the stormy weather in the South would ordinarily be a negative it actually spurred strong sales for Winter seasonal merchandise with “panic” buying for storm related merchandise and pantry loading items.  The chart below shows a day-by-day summary of the extreme record breaking cold early in the month followed by a big January thaw warm-up.  CLICK ON CHART FOR LARGER VIEW

“The most important and statistically significant factors for stronger retail sales performance in January are the consumer confidence index followed closely by less severe weather,” said Bill Kirk, CEO Weather Trends International.  Last year the January index was at an all time low (38) which in part explains the disastrous retail SSS results of -4.8% according to ICSC’s tally of 60 major retailers vs. this year’s confidence index of 53.  While 53 is nothing to get too excited about (90 is a strong index indicating a strong economy) it’s still better than last year and combined with the more favorable weather trends retailers should post gains in-line to higher than expected when results are announced Thursday, February 4^th.  Over the past 25 years a stronger than expected December (December 2009 brought very strong industry gains of +3.6% according to ICSC) is followed by a stronger than expected January 82% of cases so the math suggests more retailers will again be in positive territory!

 For a complete business-weather roundup click on the links below for a detailed PDF summary report:

U.S. January 2010 Retail Business Weather Summary Report

U.K. January 2010 Retail Business-Weather Summary Report

G-20 January 2010 Retail Business-Weather Summary Report

Posted by Bill Kirk, CEO

At 7:30am EST this morning Pennsylvania’s Groudhog weather prognosticator apparently saw his shadow predicting 6 more weeks of Winter.  Sounds like Climate Gate 2 or he needs to get his eyes checked as the official weather observations showed completely overcast skies in Punxsutawney, PA this morning!  Hmmm?  He is 123 years old so the legend has it so I’m sticking with the bad eyes bit!  Or, maybe its all the media camera lights that created the shadow which in part explains why the rodent has predicted 6-more weeks of winter in 10 of the past 11 years.  Over 12,000 people from as far away as Chile mobbed the small town of just 5,944 permanent residents to see the rodent this morning.  PETA was there too suggesting animal cruelty but this glorified squirrel is living the good life to say the least.

But, for what it’s worth our year-ahead forecast would agree with the rodent this go around and our crack marketing team says that 9 out of 10 groundhogs use Weather Trends before making their predictions!

Weather Trends International has been advising clients for over a year now that late Winter into Spring would present a lot of challenges with a cold, wet and snowy start to February and similar trends until late March followed by more cold and wet through May.  Late March early April looks to be the first strong taste of Spring so Phil is most likely right this go around!

Posted by:  Bill Kirk, CEO

Remember the Super Saturday blizzard that was going to bring down the retail industry?  Recall the headlines and non-stop coverage of the “Monster Storm to ruin Christmas”?  So why did retail industry sales come in the best in 17 months and well above most predictions?  Three reasons why:

1) Higher Consumer Confidence

2) The timing and magnitude of snowfall during the month

3) Easy sales comparisons to the prior 2-years

First, the most significant factor in December for higher retail sales is the Consumer Confidence Index.  This year that index was up 53 vs 38 last year (worst ever).  An index of 90 or better indicates a stronger economy, so while it’s still weak it’s better than last year.  A PLUS!

Second, while snowfall was again excessive the timing was better.  Recall that last year the nation had the snowiest 2-weeks before Christmas in 114 years of records with widespread storms from Seattle to Chicago to New York.  This year 12 of 14 days prior to Christmas had less snowfall, actually down 41% vs last year’s record.  The Super Saturday storm could have been worse but the fact that Friday was fine from D.C. to Boston resulted in a huge surge in advance of the storm.  Snow didn’t even start in New York until later afternoon Saturday and was over Sunday am resulting in a 1/2 lost day.  90% of the country had a very dry Super Saturday with milder temperatures than last year’s record cold weather leading up to the holidays.

Finally, it’s not as hard to beat last year when December retail sales were the worst ever in 2008 (-4.6%) and 2007 (-0.8%).  Back-to-back negative years are always followed by a positive month.  One negative was gasoline prices trending up +60% over last year but historically gasoline prices show little if any correlation to retail industry same-store sales.

Here were the predictions for overall December retail industry same-store-sales as reported in the Wall Street Journal (page A4 November 28-29, 2009):

National Retail Federation:  -1%

ArchStone Consulting:  -1%

Deloitte Research:  0%

Retail Forward:  0%

ShopperTrak:  +2%

Customer Growth Partners:  +2.4%

ICSC:  +2% to +3%

Weather Trends Intl:  +2.6% (year-ahead projection)

Know and act on the weather – beat the market!

Below are links to WTI’s historical December Summary Reports for the U.S., G-20 and UK. All 195 Countries are available from WTI.

U.S. DEC 2009 Retail Business Weather Round-up:  CLICK FOR REPORT

G-20 DEC 2009 Retail Business Weather Round-up: CLICK FOR REPORT

U.K. DEC 2009 Retail Business Weather Round-up:  CLICK FOR REPORT

Posted by:  Bill Kirk, CEO

If you read the headlines or watched the non-stop TV coverage on the “MONSTER STORM” you are left to believe this one storm will bring down the retail industry and ruin the holiday shopping season?  Not so fast!

First, recall that LAST YEAR we had the snowiest 10-days prior to Christmas in 114 years (all time record) with 1,230 inches of snow across the U.S. with 60% of the country covered in the white stuff.  Last year across the U.S. 20 of 26 days before Christmas had heavy snow (above average) with 7 days of heavy snow occurring on weekends that truly was a monster event with 8 straight record breaking snowfall days between the 17th and 24th (see national daily snowfall summary chart below).  This prolonged event last year crushed the holiday season with retail industry sales the worst ever at -4.7%.  We also have to recall that last year we had record cold weather with sub-zero temperatures across the northern half of the country the days leading up to Christmas which was a big negative for store traffic as well.  The Northwest, North Central and Northeast all had the coldest and snowiest last weekend before Christmas in decades last year making it a very widespread problem for retailers.

THIS YEAR we’ve had the one mid-week storm (Tue 12/8 – Wed 12/9) in the Midwest which was actually a plus for clearing excess winter seasonal merchandise after the warmest November in 8 years that resulted in -0.1% retail industry same-store sales declines.  As the chart above shows, only about 8 days this December were impacted by heavy snow vs 20 last year for the nation as a whole.  National snowfall for the 10-days leading up to Christmas over the past 17 years showed a 114 year record breaking spike last year with this year trending down 50% to 65% for a more typical December snowfall total.

From December 11th – 19th this year, national snowfall is down 53% vs a year ago and only this one day “Super Saturday” shows more snow.  Last year the blizzards hit on Friday which was probably worse since this year we had Friday with no weather impacts from Philadelphia to New York with 1/2 of this Saturday dry from New York North.  The Washington D.C. area to Philadelphia is clearly the hardest hit area with 12″ to 20″ snow all day Saturday.  The rest of the country – DRY – for about 90% of the rest of the U.S. this Saturday.  Some areas in the Middle Atlantic are without power so that further hampers any on-line purchases that typically soar when the weather is bad.

With much less snow expected for the balance of December, retail industry same-store sales are still likely to post +1% to +3% gains vs last year’s -4.7% and 2007s -0.7% SSS.

Posted by Bill Kirk, CEO

First we had Al Gore airbrushing in hurricanes in his new book, now we have real scientists air brushing out “inconvenient” global temperature history.  A lot has been made about the e-mails from the Climate Research Unit at the University of East Anglia that imply leading IPCC scientists, including Penn State’s Michael Mann used tricks to “hide the decline” but it goes a lot further than just e-mails.  The source code used to generate alarming temperature diagrams in the IPCC reports is far more telling of what clearly is becoming the greatest scientific fraud in history!

The 1st IPCC U.N. global warming report in 1990 acknowledged there was a Medieval Warm Period here on Earth from about 1000 to 1300 AD (warmer than today) and also acknowledged there was a little Ice Age from 1400 to 1900 AD.  This is the chart in the first IPCC Report (Figure 7C).

But that warm period would later become a problem for IPCC as it brings into doubt whether the current warm cycle is man-made or a naturally occurring cycle.  So, in version 3 of the IPCC report in 2001 both the Medieval Warm Period and the Little Ice Age were not airbrushed out but rather using computer programs to smooth out the problem period (Medieval Warm Period) so as to make the current warm period look really bad and unprecedented (see chart below that came from chapter 2 page 134 IPCC report 3)

As more and more analysis is being done on the e-mails but more importantly the programming code/data out of the East Anglia University data sets shows how these so called scientists used ”tricks” that appear fraudulently conceived to “fudge” the data.  Here’s a very small snip it of the code that was used to generate the revised global temperature chart to make it look a lot more scary than reality.  This code creates an artificial 2.5C bias at the end of the infamous “hockey stick” chart that’s not valid since it wasn’t applied to the previous 1,000 years of history.  If it had been, as it should have been, the global temperature record would look a lot more like the first chart in 1990. 

valadj=[0.,0.,0.,0.,0.,-0.1,-0.25,-0.3,0.,-0.1,0.3,0.8,1.2,1.7,2.5,2.6,2.6,2.6,2.6,2.6]*0.75 ; fudge factor
yearlyadj=interpol(valadj,yrloc,x)
densall=densall+yearlyadj

ClimateGate is just the tip of the iceberg as there are many “tricks” that have been used in U.S. government data sets to change one part of history and not the other to make declines in sea ice for example look more exaggerated or unprecedented than they really are.

Dilbert got it right – when in doubt MAKE IT UP!