Warm Winter Spurs Spring Mindset Among Consumers
BERWYN, Pa. — As the calendar flipped to March, spring — and the end of another winter — came into focus. And that's good news for convenience stores, as warmer weather typically means stronger sales.
"Even though the retail spring officially began back in February, consumer purchasing is really just starting to ramp up as the weather is warming up as well," Evan Gold, executive vice president, global services at business weather intelligence provider Planalytics Inc., said during the company's Spring Preview webcast held March 3.
Looking over the past few months, Gold noted that January did trend slightly colder than normal, driven by the West. However, the East was warm and that warmth really stifled demand for warm-weather items in December and January.
However, an epic blizzard did strike the Northeast corridor in January, bringing a season's worth of snowfall to most markets, like Washington, D.C., New York and Philadelphia.
"That was a pretty significant event for a lot of folks, especially those seasonal businesses. While it did happen in January and it was traffic limiting, it did help to clear out some of those seasonal items and drive some of that demand I think businesses were looking to see," Gold explained.
February also saw warm temperatures — in fact, it was the warmest February since 1999 — even if the West experienced cooler conditions compared to the previous year.
"There were still some shots of cold air, but the real story for February was [that] there was enough warmth that ... it started to get people into that spring mindset," Gold said.
And that is music to retailers' ears, especially since February is traditionally one of the lowest, if not the lowest, retail months of the year in terms of annual spending by consumers.
Looking at the current month thus far, Gold noted that March 2016 is starting off warmer than March 2015 did, and with spring right around corner, many consumers have spring fever.
"In week two of March, the eastern two-thirds of North America — we are talking major population centers in the Midwest and Northeast; places like Chicago, New York, Boston — temperatures will be in the 60s and the 70s — 20 to 30 degrees above normal," Gold said. "That is going to get consumers into a spring mindset. That will drive demand for all kinds of seasonal categories like apparel, cold drinks, and lawn and garden categories."
Easter also falls in March this year, and the combination could prove fruitful for retailers.
"While Easter is earlier this year, and that does tend to bode well in terms to purchasing, the warm-up that is going to happen during the run-up to Easter is going to be significant because it is going to get consumers into that spring mindset," he said.
Pushing ahead to April, temperatures this year may be cooler than last year, considering that just about every place in North America was at or warmer than normal in April 2015. But the warm start to spring will have already set in among consumers.
"I think the story here is the warmth that is going to happen in March, compared to last year," Gold said. "Consumers are already going to be in that spring mindset when you get into April, so the cooler conditions will have less of a negative impact compared to last year when we had a very cold March."
What does this all mean from an economic perspective?
"It should be a very favorable spring," Gold concluded.
RETAIL SECTOR RECAP
As part of the webcast, Deborah Weinswig, executive director and head of global retail and technology at the Fung Business Intelligence Centre, also provided a 2015 retail recap.
The online channel, she said, is growing fast across all of retail. The retail industry, according to Weinswig, has seen innovation across the model of buy online and pick up in-store, as well as the model of buy in-store and have delivered to the home. Traditional retailers are beginning to utilize their stores as warehouses.
"You have to applaud the traditional retailers in terms of how they have changed their fulfillment model, and I think we will continue to see this change," she said, noting click-and-collect is really in its early stages in the United States.
What has been surprising, said Weinswig, is that retail store closings continue. Specifically, she pointed to Walmart's decision to close 269 stores, including 150 in the U.S. Other notable closings in 2015 included: Fresh & Easy (161 stores), Walgreens (200 stores) and Rite Aid (40 stores).