May was certainly much improved weather-wise compared to the worst April in 37 years for retailers with the warmest and driest May (rainfall down 17% vs last year) in three years. Good for retail? Not really! The weather was unfortunately completely out-of-sync during the month of May with a warm start but cooler and wetter finish that will again keep retail same-store sales the 4th weakest in 22+ years with expectations of 2.5% gains when results are announced tomorrow. This will be well below last year’s +4.5%, and below the 10-year average of +4.1%.
“The problem again this month was an out-of-sync weather pattern with the month starting off with the warmest week prior to Mother’s Day in 15+ years which helped seasonal category sales to soar 100% to 1000%, but then a dramatically cooler/wetter week prior to Memorial Day for the nation as a whole (the Northeast was the exception) with much weaker sales over the holiday that will weigh down overall industry same-store sales results”, said Bill Kirk, CEO Weather Trends International. Excess inventory is also a concern for many seasonal items as the frequency of hot days over 90F across the country year-to-date is actually down 52% compared to last year’s hot start. The table below shows that in the South Central States, the number of hot 90F days is down an amazing 95% with only the Southwest showing more hot days over 90F than a year ago (up 33%), although even there, the number of 100F days are down 38%.
Combining the out-of-sync weather factors with record gasoline prices trending 12% higher than a year ago and food inflation up 15% year-to-date (the fastest rate of inflation in 15 years), it’s not surprising why consumers may be pulling back again this month on discretionary spending. Retail sales results are announced tomorrow.