The maps show last week’s (weekending May 19th, 2007) temperature and precipitation trends compared to the same week last year (weekending May 20th, 2006).

National temperatures last week were -0.5°F COLDER than last year and -0.4°F BELOW NORMAL for the nation as a whole.   This ended the streak of three straight warmer year-on-year weeks for the nation as a whole.  The positive factor was the driest week nationally in 11 weeks.  This is a plus for store traffic and outdoor activities which favors garden categories, food and Beverage categories, grills, suncare, deck stains, and car wax among others.  The ever increasing negative on consumer spending is record high gas prices.  A recent National Retail Federation survey found rising gasoline prices worry consumers and retailers as prices soar for the sixth straight day.  40.2% of consumers surveyed are taking fewer shopping trips, 30.7% said they are shopping for sales more often, 24.1% said they are spending less on clothing, and 32.6% have decreased their vacation travel plans.  The very tough weather comparisons in the weeks ahead will likely result in a weak May for retailers.  ICSC expects retail industry gains of 2% to 2.5% which would be 4th worst in 22 years.

LAST WEEK (6-12 MAY) in the U.K. was a disappointment for retailers weather-wise with cooler and wetter conditions compared to a year ago for the week overall.  Footfall was most likely less than stellar throughout the week as it was the greatest weekly change toward wetter weather for the UK as a whole since the beginning of March, as well as the wettest second week of May in at least 14 years.  While temperatures did trend above normal for the week overall, they were cooler than last year for the first time in six weeks which may have caused a slowdown in sales of seasonal categories.

The maps above show last week’s temperature and precipitation trends compared to the same week last year. UK temperatures last week trended 1.1°C COLDER than last year but 1.2°C ABOVE normal. This broke the streak of FIVE weeks in a row of warmer year-on-year weather for the UK as a whole, but temperatures did still trend above normal.  The bigger story for the week was that it was the greatest weekly change toward wetter weather since the beginning of March.  It was also the wettest second week of May in at least 14 years.  The wet weather most likely led to a significant decrease in footfall for the week overall.  However, the wet weather will be positive for allergy remedy sales in the coming weeks as the grass will begin to grow rapidly leading to a considerably higher pollen count.

Last year, there was extreme drought in the Central States, this year excessively wet conditions.  Dryness in the Southeast will improve while the Western drought worsens.

Weather Trends International will update our retail and suppliers as these reports are updated.

Retail sales were announced on Thursday and the results were the worst in 37 years (-2.4% according to Chief Economist Mike Niemira at ICSC).  This was due in large part to the coldest April in 10 years, wettest in four, snowiest in 14+, worst Easter weather in 12 years, the 1-week Easter shift and near record gasoline prices.   As we discussed months ago, prolonged out of sync weather can lead to recessions and April was clearly out of sync.  Alan Greenspan thought a recession was likely in 2007 and the weather is certainly helping to make that likely, especially if your Summer-Fall trends come to fruition.

The good news is May is off to a much better start with the 3rd straight week with national temperatures trending warmer than a year ago and above normal, but this will be short lived.

It was also the first week nationally to have below average rainfall in six weeks which is an added plus for store traffic and outdoor activities, benefiting many seasonal categories.  It was also only the 2nd week this year to trend both warmer and drier than a year ago – the most ideal conditions for stronger sales gains this time of year.  Rain was still excessive in the Central States where the worst flooding since 1993 is occurring.  This will drive up Corn prices as planting in this region is way behind schedule.

National temperatures last week were +4.9°F WARMER than last year and +3.7°F ABOVE NORMAL for the nation as a whole. This was the 3rd straight week to trend both much warmer than last year and above normal.  However, it was only the 2nd week this year to trend both warmer and drier than last year – the ideal scenario for stronger store traffic and demand for warm seasonal categories.  The timing in advance of Mother’s Day was ideal for most seasonal items.  This was welcome relief after the worst retail sales losses in 37 years with retail industry same-store sales -2.4% based on ICSC’s tally.  This was only the 3rd time in 22 years that retail sales were in negative territory due in large part to the coldest April in 10 years, worst Easter weather in 12 years, wettest in four and snowiest in 14+.  The tough comparisons to last year’s best April gains in six years didn’t help any.  The much more favorable weather here in early to middle May will help get the gains back in positive territory, but more challenging weather trends are looming in the weeks ahead.

April retail same-store sales are expected to be in negative territory when results are announced on Thursday; this has only happened twice in 22+ years! The legitimate culprit is the weather as it was the coldest April in 10 years, wettest in four, snowiest in over 14 years and the worst Easter weather in 12 years. Near record high gasoline prices only added fuel to the fire making this an April most retailers will want to forget and a very disappointing end to Q1 2007.

“While the April retail news will be very grim, it will also weigh down quarterly earnings which will likely create some anxiety on Wall Street over the next few weeks”

- Bill Kirk, CEO Weather Trends International

The worst April gains on record were +0.3% back in 1988 and the worst gains for any month were in March 1995 at -0.8% and expectations are for a -1% industry year-over-year loss – worst ever.

Regionally, the Northeast and the Central U.S. had the most extreme weather with snowfall trending up 788% over last year in the Northeast and up 917% in the North Central U.S.  The Southwest was the only region to trend drier than a year ago – a slight positive for store traffic and retail sales.