Apropos of our last blog “Holiday Shopping Season 2010: Weather to Make Retailers’ Spirits Bright”, Weather Trends International is tracking the threat of a cold blast of air headed for the northern U.S. during the Thanksgiving holiday week. As the Thanksgiving holiday approaches, the frozen turkey won’t be the only thing that needs to be thawed out. Cold, Arctic air is projected to sweep across Canada and the northern tier of the United States starting next weekend (11/20 & 11/21) and persisting through the Thanksgiving holiday weekend. For the U.S. as a whole, this is shaping up to be the coldest Thanksgiving week since 2003 and the 5^th coldest Thanksgiving week in nearly 20 years. Low temperatures will approach 0^oF across North Dakota and Montana, and temperatures across the northern tier will trend -10 to -20 and even -30^o F colder than last year. Mainly dry weather will accompany the Arctic air mass, however, a bit of snow cannot be ruled out in places like Minneapolis, MN or Seattle, WA. Disruptions to store traffic during the crucial Black Friday weekend should be minimal with very cold weather enhancing seasonal category sales.

Retailers across the northern U.S. should prepare for dramatic increases in demand for cold weather categories. Expect year-on-year demand for air filters, hand & body lotions, fire logs, antifreeze, and pantry loading food items to see strong double digit increases. Very strong double, or even triple, digit gains should be anticipated for car batteries, outerwear and heaters as consumers contend with bitter cold during the holiday week. The chart below shows the temperature change versus last year for the coldest days of the “Thanksgiving Winter Blast” in Chicago, IL; Minneapolis, MN; and Seattle, WA and the expected sales increases (Image is linked to a larger view).

Parts of the East and South will see the arrival of cooler air with this air mass although temperatures will not drop as dramatically as places in the North Central and Northwest. Still, cold weather categories will receive an extra boost from the colder weather with single to double digit increases in demand for body lotions, air filters, rodenticides, hot beverages and soups, and fire logs.

As we lay to rest the ghosts and goblins of Halloween and finish up those last pieces of candy, all eyes turn to the fast-approaching 2010 holiday shopping season. Anyone that has been out shopping during the past week has noticed that retailers have swiftly loaded the shelves with holiday cards, Christmas lights, toys, etc. and the return of “Jingle Bells” to the store intercom system. If that is not enough to get you into the holiday spirit, perhaps the weather can help. Following the 2^nd warmest September and October, collectively, in almost 20 years the beginning of November 2010 has brought many of us back to reality with the coldest start to November in 3 years for the nation as a whole. Same-store-sales for many retailers have been less than stellar during the mild Fall, so this change in the weather pattern is a welcome sight for the retail industry, especially for apparel and department stores who have struggled with excess inventories of coats, sweaters and fleece items. Retailers have reason to rejoice this holiday season as the weather looks like it will cooperate through the end of December 2010.

November 2009 was the warmest in 8 years and had the least snowfall in over 18 years nationally, which was an overall negative for cold weather seasonal items. Things are looking brighter for seasonal items this year as November 2010 promises to be much cooler and much snowier across a large portion of the country. The northern half of the continental U.S. will trend colder than last year with the greatest year-over-year change in the North Central states, including the Dakotas and Minnesota. Weather Trends International (WTI) expects snowfall to increase over last year in the colder, northern half of the country from the Rocky Mountains to the interior Northeast. Snowfall is projected to pick up in the mid to late part of November resulting in the snowiest November in 5 years. Colder and snowier weather, along with pent-up demand (thanks to the warmer start to Fall), will bring healthy gains for seasonal categories. Snowfall should not be too disruptive to store traffic as snow tends to melt quickly this time of year, so Black Friday Warriors fear not! The International Council of Shopping Centers (ICSC) forecasts gains of 3-4% for the retail industry and WTI projects results will beat or come in on the high-end of expectations given the favorable conditions for the month.

December 2009 was a memorable month for many as very cold, wet and snowy weather created obstacles for shoppers venturing to the malls. Cities like Dallas, TX; Asheville, NC; Richmond, VA and Philadelphia, PA saw a marked increase in snowfall with many of these locations nearing or exceeding average snowfall for an entire season in December alone. This year retailers and shoppers alike can look forward to a less difficult December 2010 as snowfall trends the least in 4 years and temperatures trend the warmest in 4 years. The Rocky Mountains, mountains of the Northeast and downwind of the Great Lakes will be the best bet for those dreaming of a white Christmas as snowfall will be the greatest in these areas. WTI research shows that less snowfall and warmer temperatures in December helps to boost overall retail sales. Non seasonal gift categories, like jewelry and electronics, will benefit from warmer and drier weather, but at the expense of cold weather categories. Store traffic will also reap the benefits of less snow this year as shoppers will have an easier time getting to the stores and less will have to resort to shopping online. The negatives for the month will be difficult comparisons to last year, when same-store-sales rose +3.6%, and less favorable conditions for cold weather categories. ICSC expects that the holiday season overall, which includes November and December 2010 collectively, will come in at 3-4% and WTI projects sales will be in-line or on the high-end of expectations.  

October’s muted sales results will mean heavier discounting early on this holiday season which will be a boon for savvy shoppers. Timing promotions to coincide with favorable weather will be an effective strategy for retailers to overcome the negatives of heavy discounting, especially for cold weather categories which will see a decrease in demand during December. High unemployment and difficult comparisons to last year will dampen overall retail results, but factoring the weather into retailers’ plans should subdue these negatives. Effective planning of promotions and less obstacles for shoppers in December will insure that retailers’ cash registers jingle all the way through the end of December.

U.S. OCTOBER 2010 SUMMARY: For the U.S. as a whole, October 2010 trended the warmest in 15 years with the Central states and Rocky Mountains trending the warmest or 2^nd warmest in 18+ years. Temperatures trended warmer or similar to last year for 26 out of 28 days of the month as only the final 2 days of the month trended colder than last year. At the start of the month unusually warm, 80 degree temperatures crept all the way into Minnesota and Wisconsin, while temperatures as far north as South Dakota reached into the 90s.

Precipitation also trended on the extreme side with the driest retail October in 18+ years thanks, in large part, to the current La Niña and lack of tropical activity close to the U.S. mainland. The West Coast was the exception with record setting rainfall early in the month. Los Angeles, CA broke a 94 year-old record at the beginning of the month with a rainfall of 0.3”. Reno, NV also set a new record with a 1.09” rainfall which is about 15% of their annual average rain total. Snowfall totals were some of the least in almost 20 years which is a complete reversal of last October’s snowfall trends as last year was the snowiest in 18+ years.

One of the warmest, driest and least snowfall Octobers of the past 20 years is a very rough environment for retail sales. Cold, wet and snowy conditions are ideal for Fall categories as this easily allows consumers to slip into the Fall and even Winter mindset. Warmer and drier weather meant more consumers spent time outdoors on Fall foliage trips, wine tours, hayrides, etc and less time inside shopping malls. However, traffic at restaurants and home centers tend to benefit from warmer and drier weather. Also, categories like cold beverages, BBQ foods and other tailgating items should have seen positive results due to the warm and dry weather. Cold weather categories like coats, sweaters, heaters, and snow removal products struggled the most during the month and retailers planning off of last year’s cold and snowy October likely had large amounts of excess inventory. Given the unfavorable weather and consumer uneasiness leading up to the elections in November, WTI expects same store sales results to come in below expectations or, at best, on the low end of expectations.

U.K. OCTOBER 2010 SUMMARY: Colder and drier weather prevailed this month across the United Kingdom with colder than normal temperatures and the driest conditions in 3 years. The weather was very deceiving at the start of the month with much warmer and wetter weather than last year, however, the mild weather did not last long as cooler and drier weather took over during week 2. Temperatures continued to fall in week 3 as Arctic air infiltrated the country dropping temperatures below 0 in Ireland and much of western and northern Great Britain. Snow accompanied the Arctic air in the Scottish Highlands and northern England where anywhere from a dusting to a few centimeters of snow accumulated. Arctic air hung around into the first part of week 4 with milder temperatures later in the week, but still colder than last year. Typically, Autumn is a very unsettled time for the U.K., but this month was a lot more settled than normal with many regions experiencing  back-to-back days of dry weather.

Mild weather at the beginning of the month was favorable for Summer consumable categories like fresh produce, grilling foods and cold beverages but at the expense of cold weather merchandise. Luckily, cooler weather arrived during week 2 and should have boosted demand for items like jackets and jeans. Drier y-o-y conditions were favorable for footfall at stand alone retailers and home centers, while wetter weather in southeast England was a positive for retailers at enclosed shopping malls. Cold weather categories received an even bigger boost the following week as Arctic air sent a rude awakening to consumers and reminded them that Winter is around the corner. Items like pantry loading foods, sweaters, coats, boots and electric blankets should have seen an uptick in demand. Colder and wetter weather in Wales and central and southern England during the final week of the month was extremely favorable for cold weather categories and footfall at indoor shopping centres. Seasonal categories should have held up well this month, however, consumer uncertainty continues to weigh heavily on the economy. The worst performing categories will likely be discretionary items, big ticket items and durable household goods.

G-20 OCTOBER 2010 SUMMARY: La Niña played an integral part in influencing the weather patterns over North America with warmer than normal temperatures in the U.S. and Canada and below normal precipitation. Meanwhile, cooler trends dominated Central America and Mexico where temperatures trended the coldest in 18+ years. Across the Atlantic, cooler weather was notable in Europe where temperatures trended the coldest in 3 years.  Farther south, temperatures in the Middle East trended the warmest in 18+ years. Precipitation trended much wetter in southeast Asia where monsoon rains and potent typhoons dumped exorbitant amounts of rain leading to flooding and landslides. The most notable storm of the month was Super Typhoon Megi which pummeled the northern Philippines and, later, southern China packing sustained winds of up to 167 mph (268 km/h).

Autumn categories struggled in the U.S. and Canada as warmer and drier weather was a killer combination for those categories, however, the weather provided Summer consumable products with a prolonged season. Europe and parts of eastern Asia were more favorable for Autumn categories as cooler weather provided a healthy start to the season for items like heaters, pantry loading foods and apparel. Cooler weather in the southern hemisphere across Australia and parts of Argentina and Chile created a challenging start for many Spring categories. In the wake of Super Typhoon Megi the Philippines, Taiwan and southern China lost substantial amounts of crops, communication and electricity services throughout the area and an overall disruption to retail business in directly affected areas.

U.S. SUMMARY REPORT

U.K. SUMMARY REPORT

G-20 SUMMARY REPORT