Posted by:  Bill Kirk, CEO

Remember the Super Saturday blizzard that was going to bring down the retail industry?  Recall the headlines and non-stop coverage of the “Monster Storm to ruin Christmas”?  So why did retail industry sales come in the best in 17 months and well above most predictions?  Three reasons why:

1) Higher Consumer Confidence

2) The timing and magnitude of snowfall during the month

3) Easy sales comparisons to the prior 2-years

First, the most significant factor in December for higher retail sales is the Consumer Confidence Index.  This year that index was up 53 vs 38 last year (worst ever).  An index of 90 or better indicates a stronger economy, so while it’s still weak it’s better than last year.  A PLUS!

Second, while snowfall was again excessive the timing was better.  Recall that last year the nation had the snowiest 2-weeks before Christmas in 114 years of records with widespread storms from Seattle to Chicago to New York.  This year 12 of 14 days prior to Christmas had less snowfall, actually down 41% vs last year’s record.  The Super Saturday storm could have been worse but the fact that Friday was fine from D.C. to Boston resulted in a huge surge in advance of the storm.  Snow didn’t even start in New York until later afternoon Saturday and was over Sunday am resulting in a 1/2 lost day.  90% of the country had a very dry Super Saturday with milder temperatures than last year’s record cold weather leading up to the holidays.

Finally, it’s not as hard to beat last year when December retail sales were the worst ever in 2008 (-4.6%) and 2007 (-0.8%).  Back-to-back negative years are always followed by a positive month.  One negative was gasoline prices trending up +60% over last year but historically gasoline prices show little if any correlation to retail industry same-store sales.

Here were the predictions for overall December retail industry same-store-sales as reported in the Wall Street Journal (page A4 November 28-29, 2009):

National Retail Federation:  -1%

ArchStone Consulting:  -1%

Deloitte Research:  0%

Retail Forward:  0%

ShopperTrak:  +2%

Customer Growth Partners:  +2.4%

ICSC:  +2% to +3%

Weather Trends Intl:  +2.6% (year-ahead projection)

Know and act on the weather – beat the market!

Below are links to WTI’s historical December Summary Reports for the U.S., G-20 and UK. All 195 Countries are available from WTI.

U.S. DEC 2009 Retail Business Weather Round-up:  CLICK FOR REPORT

G-20 DEC 2009 Retail Business Weather Round-up: CLICK FOR REPORT

U.K. DEC 2009 Retail Business Weather Round-up:  CLICK FOR REPORT