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Cowen: Colder Temperatures Hit But Retail Traffic Doesn’t Pick Up

Though the U.S. got the colder weather most retailers were hoping for, a pickup in traffic did not come with it.

Temperatures for the third week of December were a little more than 10 degrees colder than last year and snowfall was up 145 percent, according to retail analysts at Cowen and Company. In the same week, store traffic fell 16.4% year over year, worse than the previous week’s 12.3% and well below Cowen’s initial estimates that it would be down between 5 percent and 7 percent.

The Midwest saw the biggest fall in store traffic, down 23.3%, followed by the Northeast, which was down 19.78%. Apparel traffic fell 16.83%, nearly double last week’s decline, according to Cowen, and same store apparel traffic was down 17.65%.

In November, the story was that abnormally warm weather was keeping shoppers out of stores, according to Cowen. Analysts said at the time that December cold would be a boon for retailers as they could sell cold weather apparel at full margin, but stores may not be bringing in the traffic to accommodate those much needed sales.

Weather analytics firm Planalytics said earlier this month, however, that the colder December temperatures should bring a 5 percent increase in outerwear sales in the month.

The verdict still seems to be out on whether cold weather is good or bad news for retail.

An article in 24/7 Wall Street said, “Too much cold (and especially snowy) weather may keep consumers snug in their in their homes, tapping away at keyboards and mobile devices as they buy holiday gifts from home. That would be okay, but one company sucks up most of that spending.”

Forty percent of online sales went to Amazon in the last two months of 2015, and if the cold temperatures drive shoppers online instead of into stores for outdoor gear, it may be serving to pad Amazon’s pockets even more.

Cowen said the fourth week of December should see traffic down between 10 percent and 12 percent, when temperatures will trend much colder.