The cycle of good and bad weather that retailers often credit—or blame—for sales fluctuations will likely swing into the negative in March as Tuesday’s Nor’easter disrupted travel and forced store and mall closings.
Bad weather is just another challenge for the apparel sector, which is already struggling with declining store visits and downbeat sales. While home-improvement retailers led by Home Depot and Lowe’s have seen demand rise thanks to an improved housing market, cold weather will likely hurt sales of lawn and garden goods in a key sales month.
March is forecast to be the fifth-coldest in 30 years, in contrast with March 2016, which was second-hottest on record, said Bill Kirk, CEO and Co-Founder of Weather Trends International, which provides long-term weather foreacasts and advisory services to the retail sector.A single-degree temperature drop can translate into a 2% to 3% hit in apparel sales.
“That’s a huge negative,” Kirk said in an interview. A single-degree temperature drop can translate into a 2% to 3% hit in apparel sales, he said. With a forecast that March temperatures in the eastern two-thirds of the country will turn 5 to 15 degrees colder than last year on average, the apparel industry alone could see a 15% to 45% weather-related sales decline. More than 70% of the population lives in the eastern two-thirds of the country, he noted.
Planalytics, another weather consulting firm, estimated that March’s weather pattern will hurt apparel retail sales by more than $500 million, with the apparel sector facing a $310 million downturn this week alone. (That said, the decline will be partly offset by a roughly $208 million boost in sales of early spring merchandise in February, which Planalytics said was the second-warmest February on record.)
“The bump in February, while good, was too early in the season to offset a weak March,” said Kelly Carroll, director of client services at Planalytics. “It will be an uphill climb as we move throughout the spring season. The fact that the negative conditions are focused in major markets where retailers have a large presence will work against them.”
It’s not just apparel retailers that will see a big dent in sales. Carroll said the home improvement retailers will actually be the hardest hit.