Retail

Ongoing Warm Weather Continues to Cripple Retailers

Paul Ausick

Published: January 4, 2016 10:10 am

Last Updated: January 13, 2020 3:29 pm

Unusually warm fall and early winter weather had a sharp impact on retail sales in the fourth quarter of 2015, and the latest weather forecast does not appear to be offering any relief. At least 20% of the country, by one estimate, will have experienced record warm temperatures in December.

The outlook for the first three months of 2016 from the Weather Channel calls for well above average temperatures north of a line running west from just south of Washington, D.C., to St. Louis then pushing up to the Kansas-Nebraska border before sliding south to around Los Angeles. The large cities of the Northeast, Midwest and West Coast can all expect a warmer than usual winter.

According to Planalytics, a firm that helps retailers plan for weather disruptions, sales of women’s boots through the first half of December were down 13% at stores like Macy’s Inc. (NYSE: M), Kohl’s Corp. (NYSE: KSS) and J.C. Penney Co. Inc. (NYSE: JCP). Sales of other winter apparel, like hats, gloves and scarves, were down 4%.

Planalytics estimated that outerwear sales were down 10% across the United States since the cold weather shopping season started. And consumers who are not all shopped out from the holiday extravaganza almost certainly can expect to see some spectacular bargains on winter clothing in the next several weeks. High inventory levels mean big discounts to clear out winter goods to make way for warm weather clothing. Specialty retailers like Gap Inc. (NYSE: GPS) and Abercrombie & Fitch Co. (NYSE: ANF) face the greatest risk Planalytics analysts told Fortune.

There are some retailers that benefit from warmer weather. Restaurants should see more traffic, with less cold weather and ice and snow for diners to contend with. That is also good for retailers like Best Buy Co. Inc. (NYSE: BBY), Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT).