U.S. MAY 2011 SUMMARY: Cool weather started off the month, but temperatures moderated during week 2 leading to an exceptional week with temperatures reaching the 80s and 90s across the East. The weather turned less favorable for the remainder of May with much cooler temperatures and a return of widespread severe weather. There was some light at the end of the cool, stormy tunnel for the East as heat began to build towards the Memorial Day weekend. Temperatures in the West were below normal for the 2^nd year in a row and heavy mountain snow added to record high snow packs. The weather grabbed the headlines with outbreaks of severe storms, major flooding, and extreme drought making it seem like the apocalypse was at hand. The month actually started out on a quiet note with the 1^st week of May seeing the least severe weather activity since mid-March, however, severe weather came back with a vengeance by mid-May. Flooding along the Mississippi, Ohio and Missouri Rivers closed parts of major interstates, waterways and railways affecting product distribution. Meanwhile, the drought across the South Central states deepened, although there was some relief in northeastern Texas by the end of May.

A cooler and wetter May was a negative for seasonal categories, however, there were some favorable periods. Warm and dry weather during the week of Mother’s Day provided a burst of pent-up demand for warm weather categories including swimwear, sun care, bbq products, and lawn & garden in the East. Building heat going into the Memorial Day weekend in the East was another positive for retailers as consumers prepared for the holiday weekend with camping supplies, sun care, pool toys and chemicals, picnic foods, charcoal, lawn & garden and outdoor DIY supplies. Unsettled weather associated with a string of stalled frontal boundaries dampened store traffic at stand-alone retailers, but benefited mall-based traffic at various points during weeks 1, 3, & 4. Meanwhile, cool weather in the West was a negative for seasonal categories and similar to last year, but wetter weather this year was an additional negative. Severe weather and flooding increased home center traffic as consumers cleaned up, however, areas directly hit by strong storms would have seen a disruption to store traffic (see tornado reports log below). Drought in the South Central was a negative for lawn & garden categories like mowers and fertilizers as a lack of rain subdued vegetation growth and water restrictions limited consumers’ ability to care for their lawns and gardens.

U.K. MAY 2011 SUMMARY: Temperatures for the U.K. as a whole trended the warmest in 3 years and warmer than what is typical for this time of year. Precipitation was much higher than last year, but closer to normal as last year, May 2010, was the driest retail May in 19+ years (see precipitation maps below). Actually, southern locations in England were much drier than normal and the lack of rainfall sparked wildfires and caused problems for arable farmers. A majority of the precipitation was contained to the north of England, Scotland and Northern Ireland where rainfall was higher than normal. The first half of the month was the most favorable with much warmer year-on-year weather boosting demand for warm weather categories like apparel, footwear, sun care, grilling products, ice cream and cold beverages. Wetter y-o-y weather was a negative for footfall, except in southern England. Cooler weather during the 2nd half of the month dampened demand for seasonal categories, especially going into the Spring Bank Holiday weekend. Cooler and wetter weather will have dampened outdoor DIY, lawn & garden, and camping gear, although southeast England still received below normal amounts of rainfall.

G-20 MAY 2011 SUMMARY: Warmer and drier weather in eastern Europe was very favorable for Spring and outdoor categories like apparel, footwear, cold beverages, sun care, ice cream, and lawn & garden products. Meanwhile in the Southern Hemisphere, warmer weather in Argentina and Chile was a negative as milder weather dampened demand for Autumn categories. Conversely, cooler year-on-year weather in Australia was a positive for Autumn categories like long-sleeved shirts, jeans, and heaters. Flooding in Colombia, southwestern Africa and the eastern Philippines displaced many people and caused extensive crop losses, a negative for their economies.

On the heels of a robust 2010 hurricane season, the 2011 Atlantic Hurricane Season looks to be less active, but still above normal. WTI projects that there will be 14 storms with 3 reaching  hurricane status and 6 attaining major hurricane strength (category 3 or higher); the rest will be tropical or extra-tropical storms. In total, 9 storms will reach hurricane status and above. The 2011 season, which officially started June 1^st, will see the first storm by late June and the activity will last through early November.

The season will be characterized by a series of long-lived Cape Verde storms, or storms that form in the central Atlantic near the Cape Verde Islands (west of Africa). These storms will have a tendency to re-curve before reaching the Caribbean and Gulf of Mexico, but will often threaten the Carolina coastline. For the past 2 hurricane seasons the U.S. has been lucky as no hurricanes made landfall, this year we may not be so lucky. WTI expects 2 landfalling storms with North Carolina at a heightened risk for impacts from a storm. Climatologically speaking, if no hurricanes were to make landfall this year, it would be the first time in over 100 years that the U.S. went 3 years without a direct strike from a hurricane. Furthermore, if no major hurricanes (category 3 or higher) make landfall this year, then that would be the first time in recorded history that the U.S. went 6 years without a landfalling major hurricane.

Retailers along the East Coast, particularly in the Carolinas, should be on guard this season as any landfalling hurricane will bring disruptions to store traffic and increase demand for emergency supplies like batteries, flashlights, bottled water, tarps, plastic sheeting, plywood, and non-perishable foods. While the threat is not as high in the Gulf of Mexico and Peninsula of Florida, retailers there should also keep an eye on the weather as a stray storm or 2 will not be out of the question.