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.