The Mother of all Mother’s Days?

For retailers it certainly could be and there are 25 billion reasons why — but the weather ain’t one.

According to the National Retail Federation this year is expected to deliver the highest consumer spending to date.

WASHINGTON – Mother’s Day spending is expected to total a record $25 billion this year, up from $23.1 billion in 2018, according to the annual survey released today by the National Retail Federation. A total 84 percent of U.S. adults are expected to celebrate in honor of their mothers and other women in their lives.

With consumer sentiment at record highs and unemployment at record lows there’s really only one thing that could disrupt this sunny outlook.

The Weather

Mother’s Day is ranked as the third largest retail holiday of the year in the U.S (behind the Christmas holidays and back-to-school) and is, arguably, one of the most weather impacted holidays as well.

The fact that it’s a “day” means that an ill-timed storm or cold weather (as we’re seeing in real time) can have a dramatic and, in many cases, non-recoverable impact on sales and profits.

There isn’t much room for do-overs.

The Reverse Bath Tub

This is my new favorite weather–impact-on-retail-spending term as related by Home Depot during their Q1 earnings call last year.

I referenced this in a post I authored last month — it refers to the effect that weather has on driving the timing of sales of seasonal items from one week or month to the next.

It results in significant sales and margin volatility that can have a material impact on monthly and quarterly sales.

This year demand for seasonal products sloshed forward (see what I did there?) into April and out of May leaving a pretty challenging comp environment for retail sales in May and into June.

Cooler, Wetter, Weaker

While it may be a great Mother’s Day for retail overall  — as noted by the NRF — it likely won’t be great for all categories.

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Cooler, wetter weather will put a damper on demand for seasonal products

For example and perspective, my colleague Dr Mike Haydock is expecting about a 2% decrease in women’s apparel sales in May.

While he doesn’t publish a specific prediction for lawn & garden sales it’s pretty intuitive to expect a corresponding decrease there as well.

That’s bad news for the month of May (and Q2) from a retail fiscal calendar perspective.

But the good news is that the sales that pulled (sloshed?) forward into April were likely much stronger than last year and likely delivered higher margins.

So there’s that.

 

My Sunday Tweet Storm: Bad Weather Means Bad Restaurant Reviews

I started my weekly Weather Means Business Tweet Storm series two weeks ago and as predicted it’s morphed into more of a bi-weekly-ish effort.

Even that may be overly ambitious.

Never-the-less, there’s been some really interesting weather / business impact stories and studies over the last week that I’m excited to share.

Here are some of my favorites  —

Bad weather leads to bad restaurant reviews 

Bad weather has a fundamental impact on both  what we do and how we feel. It’s a universal truth that has both economic and social impacts.

Turns out the impact of the funk brought on by rainy weather has a measurable impact on the snark (and, presumably) tip level of diners at restaurants.

You can get a copy of the full study at the link here — It’s raining complaints! How weather factors drive consumer comments and word-of-mouth — or you can watch the short video below.

Fascinating study!

The Reverse Bath Tub 

Retail sales in both the US and western Europe will be facing strong weather-driven headwinds in May as colder temperatures will be slamming the brakes on demand for all things spring.

Apparel and Lawn & Garden categories and seasonable consumables (think BBQ’s and beer) will be particularly hard hit.  This will negatively impact home centers,  mass merchants, specialty apparel and department stores — essentially all of retail.

Making this worse will be the incredibly difficult comparison to last year’s record warm weather in both the US (warmest in 124 years) and the UK (warmest on record)

It’s a case of Mother Nature playing hard ball — and below the belt.

For more on what I call “the reverse bath tub effect” read my post from last month — Did the Bomb Cyclone Blow up Spring Retail Sales?

The Sport Performance Summit Atlanta

This tweet references an interesting and very timely topic:  using weather data and analytics to optimize performance —  in sport and  business.

It’s timely in that I’m going to be speaking about this topic at The Sport Performance Summit Atlanta at Mercedes Benz Stadium next month.

I’m particularly excited to be sharing the same stage as the Commandant of the Marine Corps and the GM of the Atlanta Falcons.

My Weekly Weather Means Business Tweet Storm

Welcome to the very first edition of what I’m tentatively calling my weekly “weather means business” tweet storm.

As a matter of course I closely follow press reports and the twitter-verse for weather and business related content.  It’s my thing. It’s what I do.

My plan is to regularly collate my favorite stories and publish them here.

The goal is to post this every weekend but, since this is purely a labor of love and my weekend priorities are often not mine, it may be every weekend-ish.

At any rate, welcome to the first edition and feel free to reach out with questions or comments or, even better, links to great stories that I can include.

McDonalds Buys AI Tech (Note: Watch this Space!)


“It can know time of day, it can know weather. We can also have it understand what our service times are so it only suggests items that are easier to make in our peak hours,” said McDonald’s chief executive Steve Easterbrook.

The ultimate aim was to provide a “much more personalised experience” and to be able to suggest additional items based on the customer’s initial order, he added.

Also see — McDonalds Leverages IBM Watson Advertising to Drive In-Store Visits 

Retailers come in from the cold

Relatively mild weather and a very easy comparison combined to help drive an “unexpected’ spike in March retail sales in the UK.

I discussed this in my blog post last month:

Record February UK Warmth: Retail Boon or Fool’s Spring?

My guess at this point is that the “unexpected spike” in retail spending is in large part the result of the easy comparison to last year and the record warmth at the end of February which provided a tail wind into March.

The late Easter and very warm temperatures this week will help overcome the difficult comparison to last year and continue the strong sales trend in April.

But, the May / June weather comps may prove tougher sledding as retailers will have to overcome last year’s weather-driven sales surge.

U.S retail sales soared in March 

Weather wasn’t just driving sales in the UK, US retail sales “soared” in March also.

And again, I think this is at least partially due to the combination of a relatively easy comparison to March last year and a rebound from the terrible weather in February.

The March sales trend is another very strong tell that’s signaling a very positive April retail sales environment.

See: Expected Milder Spring a Godsend for U.S. Retail 

Did the Bomb Cyclone Blow Up Spring Product Sales?

In a word:  nope!

I’ve been bullish on the impact of weather on spring retail this year as noted in the following blog posts published in late January and late March, respectively.

I’m still bullish.

Even given the dramatic media coverage and significant regional impacts of the early April “bomb cyclone” my reasoning for a much more favorable late March and April  still holds.

Here’s what’s true regarding my expectation of the effect of weather on demand for spring products this year:

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We’ve had an incredibly easy weather comparison to last April.  Warmer temperatures this year will translate into increased demand for spring merchandise — particularly lawn & garden and apparel.

It was a late winter with a colder than normal February and first half of March.  When the weather breaks cabin fever sets in and consumers break out.  It happens every year.  This year it happened 3 to 4 weeks earlier than last year.

A later Easter meant a longer pre-holiday selling period with (much) warmer temperatures than last year.

When comparing the weekly temperature trends to last year it’s clear that about 80% of U.S. consumers have been enjoying milder temperatures this year and that trend is likely to continue though the balance of April.

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There’s been a lot of dramatic and high impact weather events, but from the perspective of the national change in weather-driven demand for spring merchandise and consumables the trend has been very positive.

The so-called bomb cyclone event and subsequent snow and bitter cold no doubt had a significant regional impact.

But, the macro-level impact on U.S. retail was not enough to change the very positive spring weather-driven demand trajectory from last year.

The comp almost doesn’t get better than this for spring merchandise sales.

The Reverse Bath Tub

The challenge for retailers will come as we move into the second quarter and the weather comparison becomes far more difficult against what was a very late (but strong) start to spring last year.

For example, here’s how Kantar Retail IQ described last year’s weather impact on Home Depot —

Home Depot’s Q2 2018: Strong results as warm weather sets in

While a late start to spring weather dampened sales in Q1, Home Depot experienced what it refers to as “the bathtub effect” in Q2, in which most lost sales from Q1 spilled over into Q2. During a critical selling period for the DIY channel, many seasonal categories, such as lawnmowers, watering, and patios, posted strong comps. Notably, the lawn category, which suffered in Q1, posted record comps in Q2, highlighting the benefit from delayed weather.

This year we’ll likely see a reverse bath tub with (beneficial and profitable!) demand sloshing forward into April (and Q1) but leaving a comp challenge for May and early June.

Of course, while the weather impact on seasonal categories in April have been very favorable — particularly for Home Centers, Mass, Specialty and even Department Stores —  there are still underlying economic headwinds that may impact total sales.

But even with that caveat, Mother Nature delivered for retailers this spring with fair skies and, hopefully, following sales.