The impact of weather on retail sales is undeniable. For example, in B.C. year-to-date sales of sandals, flip-flops, shorts, bikinis and warm weather clothing and gear are way down from last year, leaving retailers holding huge inventories of unsold seasonal goods.
As a result, they need to start clearing spring and summer stock because, guess what - fall is just around the corner. Deep discounting of spring and summer fashions has become the norm in B.C., even if it means taking a loss. Old Navy, I saw the other day, was advertising flip-flops for $1. That doesn't leave much room for a profit margin.
It has been the opposite in Eastern Canada, with an unusually mild winter and warm summerlike conditions in spring.
Back in March, The Globe and Mail reported that Ontario retailers were enjoying a welcome lift in sales of shorts, sandals and other warm-weather merchandise - up as much as 30 per cent or more in some categories from a year earlier - because of the mild spring.
But what you gain on the swings, it seems, you lose on the roundabouts. The Globe also pointed out that Eastern retailers were worrying about how to recoup substantial losses from a mild winter that melted away sales of coats, boots and snow shovels.
There are several ways weather influences shoppers' demand for goods and services. It affects a person's decision to shop or not, particularly for discretionary items, as cold and wet weather encourage people to stay at home. Climate also affects demand for certain products directly: hot weather lifts sales of summer clothes and gardening equipment, while sales of umbrellas and raincoats normally rise on rainy days.
If you Google "weather and retail sales," you'll find dozens of headlines like: "Warm weather helps US retail sales" and "UK retail sales surge on warm weather," referring to the months of April and May. "Canadian retail sales rebound on warm weather," confirms the Statistics Canada site, although it is referring to Eastern Canada.
The reverse, as we know from experience here on the West Coast, is also true. "British retail sales slide in wettest March on record," says the Daily Telegraph.
"Retail sales drop after wet weather," adds the Seattle Times. So if a rainy spring cuts sales, how many pairs of shorts should a store order? The problem retailers face is that they must make their buying decisions months before they know the weather forecast. It turns out there is indeed a way to find out, although it isn't 100 per cent reliable. Several weather forecasting companies, including Accuweather, Weatherbank, SDI/ Weather Trends and others are now producing longrange weather forecasts specifically with national retailers in mind.
A couple of years back, a well-known Canadian clothing chain was told that a colder-than-normal spring would be followed by a warmer-than-usual summer, so the company decided not to mark down its shorts in June like it would normally have done - in the hope they would fly off the shelves in July and August.
In addition, the fore-cast called for warmer temperatures in Western Canada and cooler ones in the East. So the retailer distributed 8,000 pairs of shorts from the East to Western stores. The chain later reported that the moves helped it clear an additional $250,000 on that merchandise.
Doug MacDougall is general manager of Metropolis at Metrotown.
