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
Bill:
The report that came out this week stated:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $353.0 billion, a decrease of 0.3 percent (±0.5%)* from the previous month, but 5.4 percent (±0.5%) above December 2008.
I may be missing something but I am trying to reconcile the +2.6% WTI projection with the Census report. Any clarification would be greatly appreciated. Thanks in advance!
Charlie
Charlie,
Good morning. We are not tracking retail food and services sales but rather the International Council of Shopping Centers tally of 70 major broadline retailers that include the likes of Kohl’s, Target, Saks, CVS, Nordstorm’s, etc. Broadline retailers if you will which does not include auto, grocery, etc. ICSC actually revised their December number up to +3.6% which was the best performance/gains since November 2007. Hope this helps.
Bill