News > Companies
It's the weather, stupid
Neither rain, snow, heat or gloom of night can stop retailers from using the weather 'excuse.'
March 10, 2004: 1:52 PM EST
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - This is a story about the "excuses" retailers make when their sales begin to yo-yo, and "weather" or not we should believe them.

Some of these examples are pretty familiar now, considering how often we've heard them from merchants throughout 2003 and early this year.

First, it was the snow storms; then it was the unexpected warmer temperatures; then it got cold again way too soon.

Translation: All the snow and slush kept shoppers at home, so traffic and sales fell. Or, we didn't expect it would warm up so soon, and that hurt sales of our winter merchandise. Or the cool snap during summer impacted sales of our seasonal products such as swimwear, and lawn and garden products.

But occasionally, industry analysts and retailers will also credit the weather when the numbers look good.

For instance, two well-watched weekly retail sales reports Tuesday cited "the weather" for spurring sales at U.S. chain stores in early March.

According to Redbook, the pace of sales at major retailers rose 5.1 percent on a year-over-year basis for the week ended March 6, down slightly from the preceding week's 5.8 percent pace. The Redbook data tracks sales at stores open at least a year -- also known as same-store sales -- at about 9,000 stores .

"Retailers are looking particularly for improvement in seasonal business as warmer weather draws closer," the report said.

Separately, Shoppertrak said "unseasonably warm weather and an easy year-over-year comparison" led to an 8.6 percent sales jump last week.

Waiting for lousy weather

If the momentum falters going forward, blame the weather, the report said. "Early spring weather can be quite unpredictable and wet or cold weather could certainly have an adverse impact on retail sales."

"Weather does matter more at certain times of the year than others," said Michael Niemira, chief economist with the International Council of Shopping Centers, who contributed to the Shoppertrak report.

Added Niemira, "For instance, temperatures last week in the Northeast were 10 degrees warmer compared to the same period last year. That helped push sales of seasonal merchandise. Is all sales strength due to the weather? That's hard to say."

Retailers don't complain about the hot or cold temperatures until that pattern is complicated by snow, heavy rain or the wrong time of the year. "The situation then can be detrimental to their business," Niemira said.

But at least one retail analyst said he isn't buying this theory.

"We're continuing to see retailers cite the weather for either making or breaking their sales numbers," said George Whalin, an independent retail consultant. "Frankly, I think is an excuse tailored to satisfy Wall Street. Wall Street is a little more forgiving if a major retailer blames weather for disappointing sales."

"On the other hand, every major retailer subscribes to weather consulting firms that give seasonal forecasts over a period of a year in advance. They can better plan inventory accordingly," Whalin said.

"If you're a big merchant like Sears, you probably have massive data that tells you Feb. 22 is a Sunday, you expect to do 'X' amount of sales across the U.S. but sales could be down 2.6 percent in the Northeast because of inclement weather," he said. "You could get very close to that number."

That's a point that weather service companies acknowledge. The service they provide helps retailers analyze the relationship between product sales and weather elements, and predict future consumer demand up to 30 days to a full year.

"Weather is more often an excuse than a real reason, especially if sales are weak," said Mike Smith, CEO of Wichita, Kan.-based weather forecasting and consulting firm WeatherData Inc. "There are always peculiarities in the weather, but there are ways to proactively minimize the risk and maximize opportunity. Most retailers don't do that."

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Sears could not be reached for comments.

Said Smith, who is also a meteorologist, "It's relatively easy these days with the technology we have to give retailers information to help them preposition inventory. We can tell them about a snowstorm that will hit in one part of the country so that they can shift inventory in advance."

He gave an example. "There are a number of times when you go to a huge big box retailer and they're out of snow blowers," Smith said. "They say they'll have more by Thursday but restock Saturday when the snow's gone. These situations are preventable."

"Weather is a great all-purpose excuse," Smith added. "It's like airlines telling you there's a weather-related delay when I know for a fact that isn't true. But it's a difficult excuse to refute."

J.C. Penney spokesman Tim Lyon said he wasn't sure if the retailer subscribes to a weather forecaster but he did agree in part with Smith's comment.

"Retailers are citing the weather more commonly now. In our case we can see a correlation with the numbers but weather is not the only factor that affects sales," Lyons said. "You still have to have the right merchandise in stores at the right time."  Top of page

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