The Impact of Weather on Retail Sales in Spring 2009 and the 2009 Hurricane Season Forecast
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Transcript of The Impact of Weather on Retail Sales in Spring 2009 and the 2009 Hurricane Season Forecast
PaulE.WalshManagingPrincipalG2WeatherIntelligence,LLC
©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
HelpingcompaniesmakemoremoneybysystemaBcallyplanningfortheinfluenceofweatheronconsumersandbusiness
G2WeatherIntelligenceLLC
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Weather’sImpactonConsumers• Weatherisafundamentalyet
oHenoverlookeddriverofconsumerdemand
– ParBcularlyduringthehighmarginspringtransiBonseason
• Resultsinunexpectedupside/downsidevolaBlityinsame‐storesalesresults
• EasiertomeasureandpredictthanalmostanyotherinfluenceonconsumeracBvity
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RetailSegmentExposureinSpring
• Off‐the‐MallSpecialtyRetail
• Mall‐basedSpecialtyRetail• HomeCenters• MassMerchants/ClubStores• DepartmentStores
• Restaurants/C‐Stores©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
RetailSegmentExposureinSpring
• ConsideraBons
– MerchandiseAssortment
– Geography– Fiscalcalendar– Priormonth– ExecuBonskills
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HighImpactWeatherParameters• Temperature
– Primary“strategic”demandindicator– Departuresfromnormalandprioryeararekey– ImpactslargepopulaBoncentersandgeographies– Correlatesstronglytosalesofseasonalmerchandise– Predictableatseasonal(yearahead)Bmescales
• PrecipitaBon/Snow– Weekend,dayBmeeventsthebiggestimpact– Traffichindranceprimarily– Highimpactbutnotaswidespreadastheimpactoftemperature– ImpacZuleventsarenotaspredictableatlongerrangeBmescales
• Hurricanes– Trafficanddemandgenerator– BiggestandmostwidespreadimpacttheresultofhurricanepredicBonsvicelandfall– MediacoverageaheadofstormsresultsinanetplusforHomeCenters(HD/LOW),
Mass(WMT),andgrocers;resultsinanetnegaBveformall‐basedretailers
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WeatherInfluenceMarchSales• Exampleoftheinfluence
oftemperatureonretailsales
• OldNavysamestoresaleschangecomparedtothechangeinanaBonallyweightedCoolingDegreeIndex(weathersource:NOAA)
• Increasedcoolingdemandcorrelatestoincreaseddemandforspringapparel
– ~40%correlaBon
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WeatherInfluenceonAprilSales
• ExampleoftheinfluenceoftemperatureonretailsalesinApril
• NaBonaltemperaturechangeagainsttheaveragecompstoresalesofabasketof53retailers(source:GlobalHunterSecuriBesandNOAA)
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March2009(asof3/18)CourtesyofAccuWeather
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April2009ForecastCourtesyofAccuWeather
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May2009ForecastCourtesyofAccuWeather
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©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
©Copyright2009AllRightsReserved,G2WeatherIntelligence,LLC
2009IniBalHurricaneOutlookConsensus
Consensusoutlookfromallprivateforecasters:
• Belowthe10‐yearaverageand2008
• Abovethelongtermaverage
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SummaryExpectaBon
• Generallyfavorableweatheragainstaverydifficult2008springseason
• Beferphysicalclimateoverlappinganimprovingconsumerenvironment
– ObamaSBmulus(intangibleandtangiblebenefits)
– Loweryear‐over‐yeargasprices– Pentupdemandfollowingthespendingslowdownduringthe“cold”winterof2008/9
• WeatheranetposiBveinSpring2009– StarsalignedforstrongerthanexpectedretailsalesthroughMay2009
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PaulWalsh,G2WeatherIntelligenceLLC
Direct:+1.917.463.4238Mobile:+1.610.246.0623Blog/Website:www.G2Weather.com
“Changingthewaybusinessthinksabouttheweather”
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