Captain's Log Weekly Update 21 October 2019

Captain's Log

Happy Monday! :)

Remember all that snow in the Plains, 2+ feet in spots, GONE! The October sun did a number on it with only the higher terrain of the Rocky Mountains covered in snow. CLICK ON IMAGES FOR A LARGER VIEW. Season to date snowfall shows we've had our first snow in the highest elevations of West Virginia and New England but that too has mostly melted.

monday log 1

Snow Cover this morning is still at 7.2% of the U.S. but again mainly in the Rocky Mountain states. Still the most U.S. snow cover in 13 years.

monday log 2

Last week (13-19 Oct) was a warmer week year-on-year (YOY) for the U.S. overall but still cooler than average. Europe was similarly warm to last year's warm conditions and China was a bit warmer although still cooler than average.

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Looking at the U.S. Fall weather trends year-over-year we see the past couple weeks have been warmer than a year ago despite some cool and snowy periods. Using our Power of 1 Degree technology to quantify the significance of weather on sales we can see just how much this can help or hurt seasonal merchandise.

monday log 4

The past couple weeks have been warmer nationally than a year ago so not particularly favorable for a category like portable heaters. Every 1F colder YOY there is a 10% increase in heater sales, 10F colder 100%. There is a downside. The outlook shows a favorable period coming up in late October into early November with a 53% increase in YOY sales likely for the U.S. overall. This is a simple example of how our big retail and supply side clients plan inventory, allocation, timing of advertising, timing of markdowns a year-ahead.

monday log 5

This week (21-27 October) the East Coast is a tad above average and much warmer than last year so sales for seasonal merchandise will be soft. The Rocky Mountain are again both colder than last year and colder than average for the week overall so the strongest sales gains for Fall categories likely here.

monday log 6

Next week (28 Oct - 3 Nov) the first nationwide surge of colder weather moves in with strong sales trends for Fall merchandise. With the nation trending 5.3F colder than last year we would expect heater sales to jump 53%. This will be a short lived opportunity with much warmer YOY trends going into middle November.

monday log 7

NOAA issued their Winter outlook suggesting a warm/wet Winter overall with no area of the country likely to have below average temperatures. We disagree to a point as we do believe the core Winter (Dec - Feb) will be the coldest in 5 years (near average nationally) but overall a SHORT WINTER ahead!

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Looking at the ocean temperature trends compared to last year we see some dramatic difference in oceanic climate cycles. The waters off the Gulf of Alaska are much colder than last year so "The Blob" some were hoping for may not happen. Big warm blobs of water tend to create high pressure and in that spot we'd have downstream brutally cold weather in the U.S...again that's gone now. There are much warmer waters near Greenland so that does suggest a chance for a blocking pattern to set up which can bring some brutally cold weather to the U.S. - but we expect that to be short-lived in the Plains with only brief incursions in to the East. Overall our Winter outlook (Dec - Feb) is the coldest in 5 years nationally but the snow season (Nov-Mar) the least in 4 years. Middle December to early February is the best chances for stronger YOY seasonal sales gains.

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Had a great time speaking at a local charter high school in Philadelphia last week - a few hundred high school aged kids. Despite having their big tests and SATs that day, they were a fantastic group!

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Then it was a non-stop weekend on all fronts - see the video for our weekend adventures.

We hope you have a great week ahead and don't forget to follow us on social media for frequent updates. Facebook, Twitter, YouTube, Pinterest and Linkedin

- Captain Kirk out.