Did a Bomb Cyclone Blow Up Spring Retail 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 spring demand 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.

it almost doesn’t get better than this.

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.

 

 

 

 

 

 

 

Tax Refunds, Marie Kondo and the Weather

In a (great!) article published on Forbes.com this past weekend retail contributor Pam Danziger pointed out 3 trends that are converging to create new demand for spring fashion this year:

  • a later tax fund windfall
  • Marie Kondo-driven closet cleaning
  • much warmer April weather compared to last year

See: 3 Trends Are Converging To Drive New Demand For Fashion Retail

For the first two trends I recommend you read the full article — it’s a very interesting take, especially the Marie Kondo-effect.

For the weather portion, Pam and I chatted on Friday and you can get the jist of our conversation from the snippet below.


The Weather Company just released its spring forecast, and Paul Walsh, IBM’s global director for consumer strategy, says it couldn’t be better for fashion retail. After a particularly late winter, spring will come early this year with milder weather than last. It will supply a favorable tailwind to fashion retail.


While fashion retailers think in terms of seasons, consumers react to weather. “Now a days, we don’t buy based on the calendar; we buy based on how we feel. For seasonal apparel, the switch is turned on when it feels like spring,” Walsh told me. “Only then do we look into our closets and say it is time to update.”


It’s what Walsh calls the “cabin-fever effect.” Last year it happened quite late as spring didn’t really turn until late April and early May. Combined with an earlier than usual Easter last year, people didn’t feel like it was time to refresh their wardrobes until much later in the year.


This year will be different, as a late Easter, April 21, will give a longer runway to sell spring and summer fashions. “When it starts to feel like spring, we will see an extra amount of demand,” Walsh predicts, which should start to happen next week.


Given the differences in last year’s and this year’s spring, he sees retailers will benefit from good weather-driven comps. “Our predictions show that it will be a warmer than normal April,” he says, noting that The Weather Company is a subsidiary of IBM.

I’ve been and continue to be very bullish on spring weather-driven demand this year — particularly for fashion retail.

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

As a recap, here are the 4 reasons (incremental to the trends Pam noted) that will drive a weather-driven tailwind to spring fashion this season:

  • An incredibly easy weather comparison to last year.
  • Cabin fever. It’s been a late winter with a colder than normal February and first half of March. When the weather breaks consumers will be breaking out, and spending. It happens every year and it will likely happen 3 or 4 weeks earlier this year.
  • A later Easter means a longer pre-holiday selling period with weather conditions that will be much milder than last year. More time to shop due to the earlier break to spring weather means more money in the cash register.
  • The weather impact is greater than ever due to the combined effect of better forecasting, mobile access to more accurate forecasts and the synergistic impact of social media.