Weather Trends: December 2014

November 26, 2014

Temperatures are forecast to trend warmer than last year for the U.S. as a whole.  However, the Southeast may see some cooler trends compared to last year.  There is high confidence that the Great Lakes, New England, and South Central states will trend warmer than last year.  Onshore flow in the West will bring milder and wetter weather to the region.  A more pronounced flow of mositure will bring more snow to the West Coast mountain ranges.  At least one storm will eject out of the southern Rocky Mountains spreading a swath of snow from New Mexico to the Great Lakes and New England.  Following a very cold December last year, demand for winter categories will be much lower this year.  Items like sweaters, coats, heaters, and snow removal categories will see softer demand compared to last year.  The Southeast may be the only region of the country to see a year-on-year lift in seasonal category demand.  On the positive side, there should be less store traffic disruptions in the East this year as snowfall will trend less than last year. 

Source: Retailing Today, Weather Trends International

Weather Trends: November 2014

October 24, 2014

Temperatures are forecast to trend warmer than last year and normal across the Northern Plains and Northeast.  The South will be warmer than last year, but not too far from normal.  The West will trend cooler than last year with much greater precipitation in the Pacific Northwest.  In fact, much of the nation will trend wetter than last year.  Milder weather across the North may require more aggressive markdowns than planned earlier in the month, but increased rainfall will help to keep it from feeling too mild.  Black Friday weekend looks milder in the East with rain in the Central states.  Although, for the most part, the North will trend warmer, increased mositure means an increased risk of snow, especially in the West.  The heaviest snow will be across the interior Northeast, Minnesota and the Rockies.  Wetter trends in the West will help to get consumers in a winter mindset.  The lack of real cold weather will be especially noticeable for hardline categories, like heaters and auto batteries.

Source: Retailing Today, Weather Trends International

Weather Trends: October 2014

September 29, 2014

For the U.S. as a whole, temperatures will trend similar to last year and below normal, but there will be a split in trends across the nation with warmer temperatures in the West and cooler temperatures in the more densely populated East.  The month will begin with warm weather across much of the nation and that will continue into the Columbus Day weekend in the East befor turning cooler.  The Northwest region will trend wetter than last year, but it still remains drier than normal, while the Southwest will be wetter than last year and normal.  Most of the East will trend drier than normal, but we'll have to keep an eye out for any tropical disturbances, especially in Florida, although tropical activity overall will still be low.  Cooler temperature trends in the East will help to offset warmer trends in the western half of the nation.  Demand for fall apparel, furnace filters, and comfort foods should be stronger in the East compared to last year.

Source: Retailing Today, Weather Trends International

Weather Trends: September 2014

August 28, 2014

An increased risk of an emerging El Nino and a continuation of warmer than normal ocean waters in the Atlantic will produce warmer and wetter conditions along the East Coast along with an elevated tropical system risk.  The total number of tropical systems will be reduced overall, but should a storm threaten the U.S., the East Coast would be at highest risk.  Much cooler weather will be common across the Plains with increased rainfall east of the Rockies.  The western third of the nation will trend much drier as the flow of monsoon moisture is cut off earlier than normal, while temperatures are generally similar to last year.  Demand for autumn apparel will lag until the end of the month in the East when demand starts to pick up.  A warm stretch of weather around mid-month in the East will extend the summer season in the South and provide a final opportunity for summer clearance farther north.

Source: Retailing Today, Weather Trends International

Weather Trends: August 2014

July 28, 2014

WTI expects August 2014 temperatures to trend similar to last year for the U.S. as a whole.  Much of the East will trend warmer than last year with the Southeast also trending warmer than normal.  Summer clearance promotions will see the biggest returns during the first three weeks of the retail month in the eastern half of the nation.  A sharp change to colder weather at the end of the month in the North will be more favorable for back-to-school and autumn categories.  Precipitation will be greater than last year across the Plains for the month overall.  Wetter trends in the final week of August will be an additional positive for autumn categories in the East.  Hurricane activity will continue to run below normal; however, should a storm develop and threaten the U.S. mainland, the Texas Gulf Coast will stand the highest risk of impact.

Source: Retailing Today, Weather Trends International

Weather Trends: July 2014

June 27, 2014

WTI expects July 2014 to trend similar to last year for the U.S. as a whole.  The East will trend near normal or cooler than normal, while warmer than normal temperatures will be confined to the West.  Overall, the peak of the summer is shaping up to be very similar to 2013 but with a few major timing differences.  Unlike 2013, the hotter weather in 2014 will be back-end loaded in the month just as back-to-school shopping begins, which is a negative for early fall apparel, but favorable for clearing out summer inventory.  A cooler Fourth of July week in the Northeast and West will drag on sun care and beverage sales, but a spell of warmer weather later in the month will help to recover some earlier holiday losses.  Tropical activity will continue to be subdued, especially during the first half of the month, but there may be a slight pick up later in July with the highest risk areas being south Florida and Texas.

Source: Retailing Today, Weather Trends International

Weather Trends: June 2014

June 4, 2014

WTI expects June 2014 to trend similar to last year and above normal for the U.S. as a whole.  Cooler and more normal temperatures can be expected from the Western Plains to the Rocky Mountain states.  Temperatures will be cooler than last year along the West Coast, but still above normal with slightly weaker demand for summer categories.  In the Northeast, temperatures will trend similar to last year while precipitation trends drier than a very wet June 2013, which will benefit store traffic and increase demand for outdoor categories.  Meanwhile, rainfall will be greater in the Central Plains compared to last year.  Warm and humid weather across the South will help drive incremental gains in swimwear, pool chemicals, beverages, air conditioners and summer apparel.  Sales will be flat to down slightly in the Northeast.  A cold front will sweep through the East late in the final week of June which will usher in a cooler and drier air mass for the Fourth of July weekend.  June 1 signaled the official start of the Atlantic Hurricane Season.  This season overall is forecast to be below average in terms of tropical activity, but should a storm develop in June, the highest risk area will be southern portions of the Gulf of Mexico and Caribbean.

Source: Retailing Today, Weather Trends International

Weather Trends: May 2014

April 25, 2014

Weather Trends International expects May to trend the coldest in three years and drier than last year.  On the West Coast, it will be cooler than last year, but still above normal, while the South trends warmer than last year and normal.  There is a good chance that a large portion of the North will trend cooler than last year and normal.  There will be a band of severe weather potential extending from the lower Mississippi Valley northeast to eastern Ohio which will set the stage for increased demand for clean-up categories.  The nation's mid-section should see a warmer start to the month, while much colder year-on-year trends consume the Pacific Northwest and New England.  Favorable weather in the run-up to Mother's Day weekend will be a positive for apparel and gift categories.  Cooler trends after Mother's Day will be a challenge for many retailers to maintain sales momentum.  Memorial Day is setting up to be much stronger across the Northeast and Northwest as conditions trend much warmer and drier than last year, which should benefit products like charcoal, sun care, beverages and outdoor leisure items.

 

Source: Retailing Today, Weather Trends International

Weather Trends: April 2014

March 28, 2014

Weather Trends International expects April 2014 to trend the coldest in five years and drier than last year for the U.S. as a whole.  Warmer year-on-year temperature trends in the Central states will be sandwiched in between colder trends on the East and West coasts.  A more active severe weather season than last year in the South Central states can be expected, especially across parts of Texas and Oklahoma.  Storm cleanup supplies and plastic sheeting will see increased demand in harder hit areas.  There is the potential for a hard frost and freeze through late in the month in the Northeast, Great Lakes and Ohio Valley, which could damage tender vegetation in garden centers.  Following another cold March, the start of the season for many spring categories will fall into the retail April month in the East, except for the Deep South where spring has already sprung.  Although the weeks before Easter on the East Coast will trend colder than last year, most of the colder trends will fall on the weekdays while the weekends look more favorable helping to drive holiday apparel and footwear demand.  Drier trends in Florida and the Midwest will be beneficial for store traffic and outdoor categories, but wetter weather in the Southwest and South Central states will inhibit traffic at times.

 

Source: Retailing Today, Weather Trends International

Digging Out Of One Of The Longest Winters Ever: The Good, The Bad And The Ugly

March 10, 2014

For meteorologists, scientists, weathermen and millions of others, this winter has been absolutely dreadful.  And, although spring is on the horizon, much of the country is still covered in snow.  In fact, the nation's 21st winter storm just wrapped up this past weekend.

When it comes to the impact weather has on businesses, most industries, including retail, manufacturing, construction and auto, recognize the ebb and flow of weather as a significant part of their plans.  For retailers, weather forecasting models can impact everything from merchandising decisions to shipping and receiving, and even sales and staffing.

Looking back on the past few months, it's evident the 2013-2014 winter season has been a serious thorn in the side for the nation's largest industries.  In the Federal Reserve's recently released "Beige Book," a summary of commentary on current economic conditions, "weather" was mentioned 119 separate times to describe November and December alone.

Just how severe was this winter?

• Ohio had used almost a million tons of salt for its roadways as of late February, compared with 630,000 tons used on average each winter
• Erie, Pennsylvania became America's snowiest city with a population over 100,000, recording a whopping 123.9 inches of snow
• According to the National Oceanic and Atmospheric Administration, December and January averaged over the contiguous 48 states were the third-coldest months in the last 30 years
• As of January 31, there were 1,073 different snowfall records set across the country at various times
• The meteorological winter, beginning December 1 and ending March 1, marked Chicago's coldest winter in 30 years

As for the latest results from retail, industry sales in January fell 0.4 percent from December 2013, according to the Department of Commerce, led by a drop in auto sales and in categories like clothing, furniture stores and restaurants, sectors largely depending on foot traffic.  Seasonal hiring in February showed retailers took a more cautious approach to staffing their stores during the brutally cold month.

But for some retailers it hasn't been bad news:

• Ace Hardware has reported it is having its best winter in more than a decade thanks to increased sales of snowblowers and shovels
• Maine-based retailer L.L. Bean has sold out of its famous waterproof boots
• Sales for company Delivery.com are up 30 percent compared with last year as more people looked for ways to get their laundry, dry cleaning and grocery shopping done without leaving home
• Carmex, maker of their namesake cult-favorite lip balm, says its sales are up 9 percent over the past eight to ten weeks
• Pawz Dog Boots, which makes fun, colorful booties for dogs that protect them from salt and snow, says sales have more than doubled

Looking ahead, it's too soon to say if NRF's outlook for 2014 needs to be adjusted based on recent sales reports; the impact from the severe weather could have just been a blip on the radar, so to speak.  When the ground finally thaws and consumers can start enjoying spring-like weather, we will re-evaluate consumer spending.  Until then, we can only hope that winter is done having its fun with us.

Source: National Retail Federation

Weather Trends: March 2014

February 27, 2014

Weather Trends International expects March 2014 to trend similar in temperature to last year and below normal for the U.S. as a whole.  The month starts out with cold, possibly record-breaking in the North, along with some potentially snowy and/or icy weather as a storm system moves through.  Colder trends linger into the second week of the month, but toward St. Patrick's day, temperatures look to take a turn toward trending warmer than last year.  Unfortunately, following a lousy March for spring categories in 2013, this year will be similar temperature-wise across much of the North with some improvement arriving toward the mid to latter half of the month.  In the West, temperatures will trend cooler than last year but still near or above normal.  Like last year, this year is expected to be snowier than normal with much of the East seeing similar amounts to last year and the Mountain West will see a significant boost in snowfall, especially in weeks two, four and five.  Overall, spring categories, like apparel and sun care, will start the month off very weak, but some improvement will arrive around mid-March.  Demand for spring categories will be generally flat to last year, except in the Southeast where warmer temperature trends are expected.

Source: Retailing Today, Weather Trends International

Weather Trends: February 2014

January 23, 2014

February 2014 is projected to be the coldest in four years and drier than last year for the U.S. as a whole.  Much colder year-on-year trends will be widespread at the start of the month, especially across the Central U.S.  The axis of colder temperatures shifts to the Northern Tier of the U.S. by the second week of the month.  Much colder trends early in the month will help to clear remaining winter merchandise.  A taste of spring arrives in the Deep South in retail week three, making this a favorable time for categories such as sun care, apparel and cold beverages.  After a very dry January along the West Coast, the ridge of high pressure in the West will finally break down allowing for rain and snow to return to the West.  The first two weeks of February will yeild the greatest risk of snow in the Mid-Atlantic and Ohio and Tennessee River Valleys; weeks one, two and four will be the highest risk for the Northwest.

Source: Retailing Today, Weather Trends International

Weather Analytics and Retail Sales

After crunching the numbers, the National Climatic Data Center (NCDC) has found that January 2012 was the fourth warmest January on record across the contiguous United States. This is also the mildest January since 2006, which was the warmest in records dating back to 1895.

States with a top 10 warmest January (9 total) - AZ, KS, MO, MN, ND, NE, OK, SD, WY

The Weather Channel, LLC

Weather can have a significant impact on retail sales.  Consumer’s behavior changes, distribution can be impacted, regular seasonal selling can shift, etc.   Our team has recently completed analytical projects with customers using precipitation, temperature, humidity, and many more weather data points to understand retail sales patterns and then use that understanding to create forecast models.  This is the beauty of store / UPC grain retail sales data.  Combining retail point of sale (EDI 852) demand data with weather data, you can identify fascinating and very useful insights.  Some things to keep in mind….

Useful weather analytics almost always requires day grain retail data.  Week grain data is useful for some weather analytics but there are significant limitations.  EDI 852 is often weekly grain, but sometimes day grain is available.  Portals like Retail Link can provide daily grain (or lower if you want) retail sales reports so target your project to your retail customers that provide day grain retail sales data.

Studying the data carefully to identify statistical significance is critical.  Antidotal or observational research is helpful to inform your statistics but be careful about over simplifying what you see (e.g. it rained and sales are up) until you have run the numbers.

Do apply your industry and product knowledge.  If you sell a product that conventional wisdom says is impacted by precipitation or temperature, then use that as a starting point for building the model.  If the output of the model challenges the conventional wisdom, then dig into the model and look for holes until you are satisfied with the accuracy of the results.

A quality weather analytics project is not an inexpensive project, so be prepared to make an investment.  But on the flipside, we have seen these investments provide huge returns for highly weather dependent product categories.