DECEMBER 2007 BUSINESS WEATHER SYNOPSIS: It was a wholesale change in the weather pattern compared to last year when the month ranked 3rd warmest in 112 years.  This year December was the 3rd coldest of the past 15 years with 90% of the U.S. trending colder than last year and 53% of U.S. trending colder than the 30-year average.  The coldest periods were the weekend of the 15th-16th and again late on January 2nd and 3rd.  Sub-freezing temperatures occurred in Central Florida late in the retail month. Snowfall was exceptional with a 315% increase over last year for the snowiest December in 7 years. Combined with a severe ice storm in the Central U.S. this was a very disruptive pattern to the holiday shopping season.  Some drought relief occurred in the Southeast with 4-6” of rain as well as 2”-5” in California.

(Click Image to View Full Size Temperature and Precipitation Charts)

WEATHER INFLUENCED BUSINESS TRENDS:  The snow resulted in 500%+ sales gains for must have Winter seasonal items like ice melt, antifreeze, auto batteries and strong double digit gains for must have apparel items.  The negative was the disruptions to holiday store traffic and gift categories but on-line sales certainly benefited.  Stormy weather is a plus for food delivery chains like Pizza Hut but a negative for restaurants overall.  The other big negatives for retail sales continued to be gasoline prices trending 34% higher than last year and home heating bills up 40%+ in many areas in the Midwest and Northeast.  Overall retail industry same-store sales are expected to be around 1% making this the 2nd worst gains in over 22 years.  Clearly the recessionary trends continued after a better than expected November.

From December 30th to January 5th, it was by far the coldest week of Winter so far with the nation trending 9.1 degrees colder than last year and 1.4 degrees below average for the coldest last week of the retail December in 4 years (80% of the country had below normal temperatures with freezes as far South as Central Florida).  It was also dry for most of the country (except California where flooding rains plagued parts of the state) benefiting store traffic and clearance sales.  Overall, the 5-week retail December ended up the 3rd coldest in 15 years and the snowiest in 7 years.  National snowfall trended up 315% over last year which explains the exceptional demand for snow accessories and many Winter seasonal items.  Unfortunately, the stormy pattern was a negative for overall store traffic but on-line sales and food delivery sales were strong.  The negatives weighing on consumers continue to be near record gasoline prices up 34% over last year and now heating bills that could be 40%+ higher than last year due to the colder weather.

Weather Trends Intl year-ahead daily forecast accuracy of 260 core cities for the month of December was exceptional at 94.3% — predicting both the cold and snowy trends.