Weather forecasts offer brighter outlook for retailers
There will be opportunities for retailers in the upcoming months, according to Kristin Boughter, Planalytics manager of client services
The wettest April on record in the UK meant last month was a washout for retailers - but contrasts with an unexpectedly warm March that saw shoppers flock to the stores to buy items like summer clothes. With the weather changing every day, forecasting upcoming trends is as important for the apparel and footwear industry as any other. Katie Smith reports.
UK clothing and footwear sales were hit hard by record April rainfall and low temperatures according to figures released yesterday (9 May), contributing to a 3.3% fall in like-for-like retail sales by value.
"The wettest April since records began has put a dampener on retailers' fortunes," says Stephen Robertson, director general of the British Retail Consortium (BRC).
"This meteorological woe is far from irrelevant for the UK's retailers," agrees Shore Capital analyst Clive Black. While he notes "summer apparel is likely to hang on the rails," he is also optimistic that "it is still early doors in the spring and no doubt there is scope for a long, hot and steamy summer yet."
While UK retailers' spirits were dampened in April, over in the US Target Corporation lifted its first-quarter earnings forecast after posting a 7.9% rise in sales because of the warm weather in March.
And at Macy's Inc, where March sales were up 6.9%, "the early warm weather drew attention to our outstanding assortments of fresh spring goods," said Terry Lundgren, chairman, president and CEO.
Detailed weather predictions
When the right weather comes at the wrong time it can cause havoc for many retailers. Last month, Marks & Spencer reported a 0.3% drop in UK clothing sales over the three months to 31 March after admitting running short of stock of its best selling women's lines.
During the quarter, the retailer sold around 100,000 items of knitwear when it could have sold around 300,000.
Chief executive Marc Bolland stressed the difficulty in responding to unexpected changes in the weather. "You just can't react to it," he said.
However, while retailers can't control the weather, they can take measures to ensure they deal with it as effectively as possible.
Weather research firm Planalytics helps retailers to manage the impact of weather on their businesses by offering forecasts as far as 11 months ahead.
"We analyse the impact of weather on a particular category so we are able to understand how it differs between sandals or shorts or swimwear for example," says Kristin Boughter, manager of client services at Planalytics.
Retail traffic grew in the US as a result of the warm weather earlier this year - with "all areas of the business [seeing] about a 6% increase due to weather," she adds.
During March, Planalytics revealed that US sales of short-sleeved shirts jumped 25% year-on-year, while sales of shorts were up 23% on the back of the warm weather. For spring apparel and footwear sales overall, Boughter estimates a double-digit increase.
Planalytics, whose clients include Debenhams, Kohl's and Ross Stores, also looks at pricing and promotions as well as marketing timing and high-level demand planning and order flow to help retailers with inventory management.
"For example, early in the season you're going to have more favourable weather and some of our retailers will be able to adjust their deliveries from their manufacturers so that they have more products earlier in the year versus having additional shipments coming in a little bit later and missing that demand," Boughter told just-style.
What to expect in the upcoming months
Looking forward, she predicts an earlier end to the summer shopping season in the US. "June and July are expected to be much less favourable for some of those summer products," Boughter adds.
There will also be tough comparisons with last year. "As we go into the summer months, though, in the US we had a very hot summer in the Central and Eastern half of the country. So those areas will have a very difficult comparison especially as we get into June and July.
"So [retailers are] potentially looking at getting out of that summer product a little earlier than last year," she says.
"I would caution retailers that this year we are expecting a very different summer season than last year and to review their [promotions and marketing] plans carefully."
Understanding how many products to put in each location is one of the reasons retailers are using Planalytics, she adds.
"We also help with location of products, more so in the US than the UK, but distribution can be quite difficult especially between the east coast and the west coast of the US. You can have very different weather, so understanding how much product to put in each location is also one of the things clients are using us for," Boughter says.
While Boughter describes April and May as very "challenging", she says June and July are expected to be more favourable in the UK by comparison.
And as for opportunities in the near future: "Everything will be based on location, so for our clients it is very important to understand where there will be opportunities [compared] to last year to grow the business and also to minimise risks in areas that will be more challenging.
"There will definitely be opportunities every month as we go through the year but it will just depend on where they are," she concludes.
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