This past weekend’s blizzard was pretty intense.
Over 50 million people across 20 states were impacted, 12,000+ flights were canceled, coastal areas were flooded, 15 states saw over 10 inches of snow, and there were travel restrictions in New York City and Washington D.C.
But analysts say the aftermath of the storm is just beginning for the retail sector.
The “2016 blizzard [is] likely to impact January retail sales,” argue Robert W. Baird & Co.’s Jonathan R. Komp and Benjamin Bray.
“Our analysis suggests retail sales were negatively impacted during past months containing a historically prolific Northeast winter storm. Typically, discretionary categories were more impacted than non-discretionary,” they continued.
“Retail sales growth typically was ~1.6% lower during the month with a Northeast storm [ … and] the average pullback vs. trend for clothing/accessories was -3.1% and for shoe stores was -1.3%.”
Weather being scapegoated for poor retail sales is nothing new. Analysts and retailers alike have long claimed that the fickleness of weather is at least partially responsible for bad numbers.
However, the notable thing about this latest forecast is that it follows months and months of analysts saying that warm weather was responsible for Q4’s weaker retail sales: People weren’t buying winter gear because it wasn’t cold enough to warrant the purchases.
In light of that, one would think that retailers would breathe a sigh of relief that after finally seeing some nasty weather over the weekend.
But, alas, that might not be the case. Because even f people start buying winter clothes, it may be too late in the season in part because everything’s already on sale.
we suspect the major disruptions associated with The Blizzard of 2016 probably more than offset the possible benefits from the onset of more seasonal temperatures/snow, leading to slight incremental negative for our apparel/footwear coverage,” Komp and Brey noted in their report.
“We think the impact may also be slightly less negative for the outerwear/boot brands in our coverage, since the onset of more seasonal weather may have helped to finally spur consumer demand (albeit likely not at full price),” they added.
In other words, if the cold weather came earlier in Q4, then it might have inspired shoppers to buy winter gear when it would have been ideal for retail.
But now, it’s too late, and the storm probably won’t incentivise enough spending to offset its other negative impacts.
No wonder so many analysts say that the weather excuse is “nonsense.”