Weather Trends International projected a year ago that industry gains would be 3% while analysts last week were only expecting 1.5% to 2.0%. “After the abysmal conditions in March which was the coldest in 6 years, wettest in 10, snowiest in 12 and coldest Easter in 16+ years; the weather finally turned much more favorable for the first half of April, but the last week finished on a cold and stormy note putting a damper on another weather-wise strong month for seasonal items”, said Bill Kirk, CEO. “The Discounters, Clubs and even Home Centers are clearly out performing the specialty apparel retailers and Department Stores since they had more products to offer than just apparel as consumers make the must have purchases over nice to haves in light of the economy” added Kirk.
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Overall, the cold last week of April erased the warmer trends at the beginning of the month making it the coldest retail April in 8 years and 2nd driest in 16 years based on 260 major population centers but 3 strong weeks was all it took for a good retail month.
The Northeast by far had the best conditions in April with the month ranking the 3rd warmest in 16 years. This illustrates that the consumer is not dead and while facing the same economic challenges in March the weather actually was the one factor that was much more favorable in most of April. Consumers buy much closer to need for the must have seasonal items and that need is largely driven by favorable weather conditions. Gone are the days when consumers would buy well in advance of the season so weather is becoming the one catalyst that can make or break a month as we saw in March and April.
For Q1 (2 Feb – 3 May 2008) retailers faced a lot of challenges so the quarterly performance is likely to show lower than expected results despite the positive April. The 3-month quarter ranked as the 2nd coldest in 12 years, snowiest in 12 years and wettest in 10 years for the nation as a whole which are very unfavorable conditions for the merchandise retailers have on the shelves. So despite the somewhat rosier picture today, look for more weakness when the quarterly reports come out over the next month. Q1 2008 industry gains of +1.6% is the weakest gains since 2003 and 3rd weakest of the past 24 years.
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