Captain's Log Star Date 14 Oct 2019 Retail Outlook
Written by Bill Kirk
October 14, 2019
Happy Columbus Day Monday. :)
The big Plains blizzard last week dumped 1-2 feet of snow across the Dakotas which has the U.S. snowfall index tracking the most in 10 years, well above average. CLICK ON IMAGES FOR A LARGER VIEW
Snow cover this morning stands at 8.6% of the U.S. blanketed in snow which is a tad above last year, the most in 10 years and above average. Canada snow cover is not as widespread as last year at this time.
Looking at last week (6-12 Oct) weather around the world compared to the same retail week last year, we see a slightly different story. While the Plains were cold and snowy it was actually much warmer than the same week last year, while the Eastern U.S. was dramatically colder than a year ago with some areas having their first frost. The U.S. was 1.2F colder than last year and coldest in 10 years while Europe was 3.5F colder while China was 4.4F warmer.
Our Power of 1 Degree technology quantifies the changes in weather with the changes in seasonal retail sales. Today let's look at Fall apparel categories and overlay that on the U.S. year-over-year temperature trends for last week and the 3-weeks ahead.
Every 1F colder there is a 3% increase in Fall apparel sales, 10F colder 30%. But there is a downside with every 1F warmer bringing a 3% decline in sales, 10F warmer, 30% decline in apparel sales. Last week was one the most favorable Fall week so far this season with positive sales trends for apparel. But, the year-over-year weather trends are not as favorable over the next couple weeks for the nation as a whole bringing some bigger YOY sales declines. The late October - early November period does look to bring a bigger shot of cold weather but most likely very short lived with a much warmer less snowy November ahead. This is how the Power of 1 Degree make weather analytics...PREDICTIVE PROACTIVE ANALYTICS!
This week (14-20 Oct) shows the less favorable weather trends for the U.S. with 4.3F warmer trends vs a year ago making it the 11th warmest in 30 years. Rainfall is up, wettest in 5 years but snowfall less than last year.
Next week (21-27 Oct) start to see signs of the next cold front for the Central U.S. that will eventually make it to the East Coast as we approach Halloween into early November. While the U.S. overall is still 1.5F warmer than last year it's the 12th coldest in 30 years and near average. The East Coast is much warmer than a year ago which is a big negative for seasonal sales, while the Rocky Mountains are much more favorable. Rainfall is wettest in 4 years with more snowfall for the Rocky Mountain States.
Looking at the next two weeks overall across the World, we see cool conditions for the Central U.S. while much of Europe and Asia are on the warm side. The greatest year-over-year trends toward colder weather are in Alaska, extreme Northern Canada and the Northern Rocky Mountains.
Snowfall estimates over the next couple weeks show the Rockies and far NW Canada the snowy spots. Siberia is adding a snow pack as well which can be one of many factors leading to a colder core Winter ahead. WTI expects Winter (Dec - Feb) to be short by intense trending coldest in 5 years especially from Mid December to Mid February...again short but intense is the general theme with an early Polar Vortex possible in late December.
Speaking of Russia, the Raikoke Volcano that erupted back in June put a ton of sulfurous gas into the upper atmosphere which in part is creating some beautiful sunsets with a purple hue. As the sun's rays hit this gas, blue light is scattered and when mixed with the red sunsets you get the purple mixed in. We've seen some of this purple hue here in Bethlehem PA and the sunrise leaving New York City last week was pretty neat from the air as well.