Jun 23, 2009
Rain, cool weather dampen US June retail sales
Jun 23, 2009
By Aarthi Sivaraman - Analysis
NEW YORK (Reuters) - Rain and cooler-than-usual weather so far in June may have dampened demand for summer items such as sandals, swimwear and beer for retailers already hard put to counter sales declines during the recession.
The effect may be most pronounced in the U.S. Northeast, where June so far has been the coldest in 27 years and is on track to become one of the wettest Junes on record, according to weather research firm Planalytics, which has tracked such data since the 1930s.
June in the Midwest so far is the coldest in six years and has been wetter than normal, but still not close to last year when it was the second wettest in 50 years.
It is the wettest in 4 years in the U.S. Southeast and U.S. Southwest and the coldest in 42 years in the Southwest, the weather tracking firm said.
The summer season typically drives demand for merchandise such as bathing suits, shorts and summer dresses on the apparel side, and pool and garden-related merchandise on the home end.
Items such as bottled water and beer -- and conveniences such as air conditioning -- also usually see more demand in summer.
But this time, already penny-pinching consumers may not be motivated to brave the less-than-ideal weather to shop, said Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail.
"When the weather is like this, the inclination to (shop) is absolutely not there," Liebmann said. "It feels like we are going to go straight from spring to autumn or we'll just wait for the big sales and buy then."
That attitude is a far cry from a year earlier, when people bought things "like crazy" said Planalytics' chief operating officer, Scott Bernhardt.
"We knew going into June 2009 that it was not going to be favorable both from the economy and the weather," he said. "This was going to be a tough one."
The unseasonal weather stood out in New York City.
The city has failed to top 90 degrees Fahrenheit (32 Celsius) so far in June, which has happened only twice in the past 17 years, according to AccuWeather's chief long-range forecaster, Joe Bastardi.
With 15 days of rain in the first 21 days of June, New York City is on track for an all-time record in days and amount, Planalytics said. June is also set to be one of the city's coolest in 50 years, Planalytics added.
COOLER WEATHER = NO AIR CONDITIONING
Given the cool weather, not many consumer found a need to turn on air conditioners.
According to Bastardi, there was lower demand for power to run air conditioners in much of the U.S. Northeast.
Unseasonable weather is an added headache for retailers.
For months, retailers have been trying to attract shoppers who have stuck to tight shopping lists, only buying items they need in the economic slump.
Many stores turned to big sales during the past holiday season to move excess merchandise -- a tactic some have adopted again.
UBS retail analyst Roxanne Meyer has noticed more discounts and promotions at teen and apparel retailers such as American Eagle Outfitters Inc (AEO.N), Pacific Sunwear of California Inc (PSUN.O) Chico's FAS Inc (CHS.N) and Talbots Inc (TLB.N).
"We're seeing more than half the store, on average, being on sale (and) average mark downs of 50 percent off," Meyer said. "I would say they're incrementally more promotional than they were last year."
Beer and bottled water also face weaker demand in times of unseasonal weather.
"The weather tends to condition people's attitudes as well," Pirko said.
People tend to drink according to how hot it is or how much money they can spend.
One saving grace, Meyer said, was that June is typically a clearance month for clothing retailers, who mark down prices to get rid of summer items and prepare for new back-to-school merchandise.
(Reporting by Aarthi SivaramanAdditional reporting by Matt Daily in New York, Nicole Maestri in San Francisco and Ian Sherr in Chicago; editing by Andre Grenon)
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