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Is the Wintry Weather Chilling Retail Sales?

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Did the latest bout of wintry weather chill retail sales? A new study indicates that the bracing cold is discouraging consumers from visiting stores.

Applied Predictive Technologies, a retail analytics software company based in Washington, D.C., reported that during the blast of cold weather from January 5-7, nationwide retail sales plummeted 9.6%. The dip was a function of a sharp decline in transactions.

And major retailers have confirmed the study, candidly indicating that slumping sales are likely attributable to the fact that potential shoppers have been driven inside by the harsh elements. Kohl’s reported that its January sales were “significantly lower than planned” as a result of decreased traffic. Walmart blamed its recent underperformance on a combination of bad weather and a steep reduction in food stamps benefits. Both Uniqlo and Lululemon have dispatched similar explanations for their recent drops in sales.

Fred’s, a regional discounter, recorded a same-store decline of 1.8%, which it explained by citing the punishing cold. Chief Executive Bruce Efird, said, “The weather was a significant challenge for us in January.” He observed that the weather “not only disrupted consumer shopping patterns, but also resulted in more than 120 store closings during the final week of the month.”

The effects of the weather on the apparel industry has been wide but also varied, frustrating some while benefiting others. In the U.K., the sale of winter garments sharply rose, according to London’s Office for National Statistics. In November, for example, winter apparel sales jumped 3.8%. By way of contrast, an unseasonably warm October experienced a 3.4% decline.

Given the diffuse and interdependent nature of apparel and textile supply chains, it’s near impossible to comprehensively predict the full range of consequences ushered in by such extreme weather conditions. For example, the severe cold boosted demand for gas in the U.S. and E.U., which in turn forced Indian gas supplier Gujarat Gas Company Ltd. to cut shipments to textile plants in Surat, a major hub of textile manufacturing. These supplies have been diverted to E.U. and U.S. buyers. At least for the time being, this has forced those plants to close their doors, leaving 40,000 factory workers newly unemployed and apparel production halted.

For those retailers suffering from the cold, the lack of foot traffic only exacerbates an already unspectacular sales season.

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