The forecast isn’t as scary as it seems since the snow will be favorable for cold weather categories like comfort foods, snow removal products, and heavy outerwear. Cold weather apparel will do well as consumers rush to find extra layers of clothing to wear and keep them warm because this will be a “Chiller Night(s)” for Halloween festivities (Yes, that was a lame attempt at a reference to Michael Jackson’s Thriller and I apologize). Temperatures in the Northeast will trend the coldest in 9 years for the period of October 28th to the 31st. Fortunately, store traffic should not be impacted too severely as the snow is expected to stick only on grassy surfaces.

So, what did our forecast for September 2011 in the United Kingdom say a year ago? For the United Kingdom as a whole our forecast was for a warmer, above normal September with less precipitation than last year and that’s not too far off from what actually happened (see graphs above).  Not too shabby for a forecast made a year ago. In last year’s report we even called out week 2 as being the only week in September that would trend cooler than last year and that the 1st and 3rd retail weeks of the month would be the only weeks to trend wetter than last year. What actually happened is depicted in the chart below where blue blocks represent cooler temperatures than last year and green blocks represent weeks that were wetter than the comparable week of last year.  Using these year-on-year comparisons, retailers are able to leverage the weather and make more informed inventory and marketing decisions as just a -1 degree C difference in weekly year-on-year temperatures can greatly impact the amount of product sold, for example, for every -1C in weekly year-on-year temperatures there is typically a +2% increase in hot soup category sales during the cold weather season.

The British Retail Consortium’s (BRC) September 2011 Retail Sales Monitor Report places heavy blame on the weather for less than stellar retail sales results, especially for clothing. According to the ONS, clothing and footwear sales volumes were down -2.1% from last year. Meanwhile, the warmer weather, especially late in the month was cited as a boost for food and drink categories. Many of the same conclusions were drawn from our report issued a year ago, the following are some comparisons between our report and the BRC’s report:

Similarly, the forecast for the United States played out rather nicely as shown in the graphs below. We forecasted an above normal, but slightly cooler than last year September and that’s what happened. In fact, our forecast pinned September 2011 as the 5th warmest in 19+ years, it was actually the 4th warmest.

With this year-ahead guidance, retailers were able to anticipate that, for the country overall, sales of seasonal Autumn categories will have changed slightly over last year as temperatures were projected to be slightly cooler than last year (cooler is better for Autumn categories). Seeing that temperatures were projected to be above normal in September 2011, retailers would have been wise to be lean on inventories of cool weather products like sweaters, long-sleeved shirts, boots, and heaters. Analysis of 30 years of retail same-store-sales data shows that a -1F change in temperature for September overall can have a +1.1% impact on U.S. retail sales, which is huge when considering the volume of retail trade.

When the world is filled with so many uncertainties, why leave the weather to chance when there’s something that can be proactively done to prepare for what’s ahead? The technology to forecast weather a year-ahead is here and the forecast has proven skill. Although year-ahead weather forecasting may seem like “hocus pocus” to some (as a Meteorologist, I’ve been accused of witchcraft on almost a daily basis), but our forecasts have given hundreds of clients advanced insight and placed them in a position to leverage the weather rather than be a victim.

Hurricane Irene resulted in at least 1 day of lost retail trade at the very start of the month as many businesses shut their doors as she made landfall in the Northeast. Home centers and discounters gained the most from Irene as clean-up supplies, portable generators and bottled water were in high demand. Mall-based stores and discounters will have had a negative impact from Irene as consumers shifted their focus from apparel shopping to storm necessities. Clean-up categories like wet/dry vacuums, tarps, and paint will have continued to be strong through at least the middle of September as remnants from Tropical Storm Lee caused more flooding. Warm, moist air in the East was abruptly replaced with much colder, Fall-like weather during Week 3 which was a huge positive for Fall seasonal categories. The cold weather extended into part of Week 4 helping to drive demand for items like fire logs, hot soups, and mouse traps in the North Central states. Fall categories were a hard sell in the West where warm and dry weather favored Summer consumables like ice cream, cold beverages, sun care, car wash/wax, and other outdoor categories.

U.K. SEPTEMBER 2011 SUMMARY: Following an abnormally cool Summer, temperatures finally turned warmer than normal in the U.K. The 1^st and 2^nd weeks trended warmer than normal, but the biggest story was the very mild weather during the final week of the month which sent people flocking to the beaches to soak up the warm and dry weather. More Autumn-like weather could be found during the 3^rd and 4^th weeks of the month when temperatures were closer to normal. While much of England and Wales trended drier than last year, areas to the north saw more unsettled weather including a few tropical disturbances. Remnants from Hurricane Irene brought heavy rain and wind to Scotland during the 1^st week of September. During the middle of the month, Post-Tropical Storm Katia brought more heavy rain and severe gales to Scotland, Northern England and Ireland. Katia caused localized flooding in central Scotland and some power outages.

Unfortunately the arrival of more Summer-like weather in late September is a negative for retail sales as this time of year is focused on Autumn categories and drier weather in September is a negative for footfall as consumers spend more time outdoors instead of shopping. Luckily, there was pent-up demand for many warm weather categories like ice cream, cold beverages, and sun care following a cool, dreary Summer. The final week of the month will have seen double to even triple digit surges in demand for Summer consumables. More seasonable weather during weeks 3 and 4 provided opportunities for Autumn categories, although demand will have been softer during week 3 as temperatures were warmer than last year. Flooding and damage from the various tropical disturbances in the North of the U.K. will have increased footfall at home centers and demand for clean-up categories.

G-20 SEPTEMBER 2011 SUMMARY: G-20 temperatures trended +1.1C warmer than last year with a majority of the warmer weather in Europe, Russia and Canada. Europe was warm and dry for much of September with Summer-like conditions prevailing. Despite the abnormally warm weather, parts of the Alps recorded their earliest snowfall on record around mid-month. Cooler weather presided over eastern China, Mongolia, South Aftrica, and parts of the Middle East.  Typhoon Talas struck Japan early in the month and was the deadliest cyclone to hit the country since 2004. Hong Kong’s stock market and businesses shut down as Typhoon Nesat brought threatening weather late in September. Monsoon rains across Pakistan and Thailand caused flooding and destroyed millions of acres of cropland.

Very warm and settled weather in Europe favored Summer consumables over more seasonal Autumn categories. Milder weather in Canada delayed the start of the season for Autumn categories. Seasonal categories were more favorable in places like eastern China and Mongolia where temperatures trended cooler than last year. Businesses in Japan and parts of China, including Hong Kong, experienced at least 1 day of disruption as Typhoon’s Talas and Nesat, respectively, brought flooding rain and damaging winds. Clean-up supplies will have seen a rise in demand in the cyclones’ wake.

Hurricane Irene left an impression on retailers as many stores closed early or saw significantly reduced traffic on the final day of the retail month when most people are typically shopping. Consumers shifted focus from Back-to-School shopping to preparing for a hurricane. Home centers will have benefited most from the increase in demand for plywood, plastic sheeting, flashlights and batteries. Malls and department stores were some of the hardest hit retailers as consumers flocked to grocery and discount stores for staples like milk, bread, and bottled water in a pre-blizzard-like frenzy. Earlier in August, the weather was favorable for malls and department stores in the North Central and Eastern U.S. as cooler weather during retail weeks 2 and 3 boosted Back-to-School shopping; even the South Central U.S. saw a brief respite from the hot weather during week 2. With Summer finally awakening in the West, pent-up demand for Summer categories would have spurred spending, although at reduced profit margins for retailers as August is typically a clearance month.

U.K. AUGUST 2011 SUMMARY: August started off relatively mild for the U.K. as a warmer 1^st week broke a 12-week streak of cooler Y-O-Y temperatures. The warmer trends were short-lived though, as cooler weather returned for the middle of the month, but milder weather ended the month. Despite the driest August in 4 years, parts of Scotland were completely drenched in the 1^st half of the month. In fact, some areas in Northeast Scotland received 5 times the normal rainfall for this time of year. The weather turned drier for the latter part of the month, but a storm system during the Summer Bank Holiday weekend brought showers to the Southern U.K. and more persistent rain to Scotland.

Although temperatures were slightly warmer than last year, this was still the 4^th coldest retail August in 19+ years. Cooler than normal temperatures would have favored Autumn categories, especially during the cooler mid-month weeks. Mild weather at the start of the month was favorable as pent-up demand for Summer categories would have spurred sales, although at decreased profit margins for retailers. Cooler than normal weather was generally favorable for retailers, however, the headwinds this month may have muted the positive impacts of weather. The worst rioting since the 1980s in Britain resulted in early store closings and a general dampening of consumer sentiment. Many retailers faced costly losses and repairs as they were the victims of looting and damage. Additionally, concerns over the global economy will have also dampened consumer sentiment, adding to the pinch at the cash register.

G-20 AUGUST 2011 SUMMARY: G-20 temperatures were cooler than last year with slightly cooler trends in the southern parts of Africa, the Middle East, and Eastern Europe and warmer Y-O-Y trends in Australia and Western Europe.  Typhoon Muifa struck regions of Asia in late July and early August allowing for large amounts of precipitation and strong winds. In mid-August, New Zealand experienced some of the coldest and harshest winter weather conditions in decades, leading to mass power outages.

Warmer weather in Western Europe and Central Canada was beneficial for Summer clearance categories. Winter clearance categories in eastern Australia will have been negatively impacted from warmer year-on-year weather, but Spring Categories will have been positively impacted due to an earlier start. An unusual blast of winter weather in New Zealand would have benefited cold weather categories at the expense of early Spring products.  Cooler and drier weather in the southern parts of Africa will have yielded an increase in sales for Winter categories, while warmer and wetter weather in southern Brazil will have negated Winter categories.

Tropical Depression 13, possibly becoming Tropical Storm Lee later today, will be the first to make a run at the U.S. mainland. Currently, TD #13 is meandering about the Gulf of Mexico, south of Louisiana. Parts of the Gulf Coast from Louisiana to just near the western tip of the Florida Panhandle are starting to see the bands of showers and thunderstorms. Flooding will be the biggest threat from this system as the storm slowly makes landfall over the Labor Day weekend somewhere along the central Louisiana coast and then very slowly chugs through the state on a northeasterly track. By the middle of next week, the storm is only expected to have made it as far as the Mississippi/Alabama border after which it will dissipate into a low pressure system, losing its tropical characteristics. Current projections are for 10-20” of rain along parts of the Gulf Coast, including New Orleans, LA; Biloxi, MS; Mobile, AL; and Pensacola, FL. Given the slow-moving nature of this storm, widespread flooding will be expected as the storm will continuously dump large amounts of rain over the same areas. On the bright side, the heavy rain will help to eradicate the drought in parts of the Gulf Coast, unfortunately, the parched state of Texas will see very little rain from this storm. Wet vacuums, plastic sheeting, tarps, and clean-up supplies will experience a jump in demand along the Gulf Coast from Louisiana to the Panhandle of Florida.

While this weekend will be spent focusing on TD #13 close to home, another threat far out in the Atlantic will bear watching over the next week. Hurricane Katia, currently several hundreds of miles east of the Leeward Islands, will eye-up the East Coast of the U.S. as she churns west-northwestward across the Atlantic over the next several days. She is still about 6 to 10 days from any real threat to the U.S. and there are many factors that could alter her track, so the forecast path has a lot of time to change over the coming days. The most current forecasting models take Katia unsettlingly close to the Carolina coastline as she makes a turn to the northeast along the Eastern Seaboard. We will continue to monitor her progress and will issue updates as needed.

It is a good thing that most meteorologists have two eyes in their head as we will need both of them to track two tropical weather disturbances.

Tropical Storm Katia, currently in the central Atlantic, will continue to move to the west-northwest over the next several days and is destined to strengthen into the next Major Hurricane of the season.  Expectations are that Katia will re-curve well east of the U.S. and possibly threaten Bermuda before weakening as she heads back out over the colder waters of the North Atlantic.  The track of Katia is expected to remain steady as a cold front moving through the eastern U.S. this weekend should help to block a westward shift in the storm, but that was also a possibility with Irene who ended up doing her own thing than what was forecast 5 days out.  So we need to keep one eye on Katia.

The second disturbance worth watching is currently near Cancun, Mexico.  All indications point to a slow strengthening of this system this weekend with a Tropical Depression or Tropical Storm (Lee) forming by Sunday or Monday (9/4-5) somewhere off the Texas Gulf Coast.  There is fairly good agreement that this will happen, unfortunately after Monday there is no agreement on where the storm will go.  Our best estimate is that it will follow the middle track and move along the Texas Gulf Coast before making landfall somewhere near Houston onWednesday (9/7) or Thursday (9/8).  The primary threat from “Lee” would be flooding due to the slow moving nature of the storm.   At this point, the track of the storm does not look like it will bring large amounts of rain to central Texas but will instead drench only the coastal areas, so the drought in much of Texas will continue.

Impacts to retailers and consumers are expected to be minimal with increasing chances for rainfall in East Texas hampering store traffic.  As long as Katia remains well offshore its impact will also be minimal.

Major cities along the I-95 corridor from Philadelphia to Boston, should take action now in anticipation of Irene. Recent heavy rainfall over much of the Northeast, including today’s soaking rain, have left grounds saturated and prone to flooding. Irene could dump upwards of 5 inches of rain anywhere from just west of the I-95 corridor from Philadelphia to Boston and to the coastal regions. This very heavy rainfall combined with soggy grounds will cause widespread flooding resulting in damage and travel disruptions. Tropical Storm-force winds will have a vast reach with Irene and could extend to just west of the I-95 corridor. Expect downed trees and power lines to cut power to thousands and cause travel hazards.  Along the immediate coastline, storm surge and heavy rain will cause coastal flooding, leaving many areas underwater and unreachable, and tropical storm-force to hurricane-force winds will cause damage. The storm will exit the Northeast on Monday, followed by much more settled weather.

Impacts: Retailers up and down the East Coast from North Carolina to Maine will experience elevated store traffic ahead of the storm as residents stock up on emergency supplies and food. Tarps, plastic sheeting, plywood, flashlights, batteries, first aid kits, and bottled water will be some of the big sellers, especially the closer the store is situated to the coast. The impacts from Irene will be similar to that of a major Nor’Easter, but the difference will be in the length of time it takes to recover and clean-up the damage. Expect store traffic to be disrupted during the storm and at least a day or two beyond. Power outages will also affect operations along the East Coast. New York City stands the risk of massive flooding which could disrupt business operations into Monday, possibly even Tuesday as Subways and Tunnel systems potentially flood.

A change in the storm track even by as much as 50 miles east or west would dramatically change the outcome from this storm.

The greatest threat from this storm will be along the Southeast Coast, from Florida to the Carolinas, and the eastern Gulf of Mexico. We advise retailers in this area to keep a very close eye as the system develops over the next week or so and to position inventory now so that it can easily be distributed to any areas affected by the storm; Atlanta, GA is a strategic location for pre-positioning supplies. Emergency supplies like bottled water, batteries, plywood, first aid kits, and flashlights will be just some of the categories to have on hand.

Check www.wt360.com for your specific forecast.

A cooler and wetter May was a negative for seasonal categories, however, there were some favorable periods. Warm and dry weather during the week of Mother’s Day provided a burst of pent-up demand for warm weather categories including swimwear, sun care, bbq products, and lawn & garden in the East. Building heat going into the Memorial Day weekend in the East was another positive for retailers as consumers prepared for the holiday weekend with camping supplies, sun care, pool toys and chemicals, picnic foods, charcoal, lawn & garden and outdoor DIY supplies. Unsettled weather associated with a string of stalled frontal boundaries dampened store traffic at stand-alone retailers, but benefited mall-based traffic at various points during weeks 1, 3, & 4. Meanwhile, cool weather in the West was a negative for seasonal categories and similar to last year, but wetter weather this year was an additional negative. Severe weather and flooding increased home center traffic as consumers cleaned up, however, areas directly hit by strong storms would have seen a disruption to store traffic (see tornado reports log below). Drought in the South Central was a negative for lawn & garden categories like mowers and fertilizers as a lack of rain subdued vegetation growth and water restrictions limited consumers’ ability to care for their lawns and gardens.

U.K. MAY 2011 SUMMARY: Temperatures for the U.K. as a whole trended the warmest in 3 years and warmer than what is typical for this time of year. Precipitation was much higher than last year, but closer to normal as last year, May 2010, was the driest retail May in 19+ years (see precipitation maps below). Actually, southern locations in England were much drier than normal and the lack of rainfall sparked wildfires and caused problems for arable farmers. A majority of the precipitation was contained to the north of England, Scotland and Northern Ireland where rainfall was higher than normal. The first half of the month was the most favorable with much warmer year-on-year weather boosting demand for warm weather categories like apparel, footwear, sun care, grilling products, ice cream and cold beverages. Wetter y-o-y weather was a negative for footfall, except in southern England. Cooler weather during the 2nd half of the month dampened demand for seasonal categories, especially going into the Spring Bank Holiday weekend. Cooler and wetter weather will have dampened outdoor DIY, lawn & garden, and camping gear, although southeast England still received below normal amounts of rainfall.

G-20 MAY 2011 SUMMARY: Warmer and drier weather in eastern Europe was very favorable for Spring and outdoor categories like apparel, footwear, cold beverages, sun care, ice cream, and lawn & garden products. Meanwhile in the Southern Hemisphere, warmer weather in Argentina and Chile was a negative as milder weather dampened demand for Autumn categories. Conversely, cooler year-on-year weather in Australia was a positive for Autumn categories like long-sleeved shirts, jeans, and heaters. Flooding in Colombia, southwestern Africa and the eastern Philippines displaced many people and caused extensive crop losses, a negative for their economies.

The season will be characterized by a series of long-lived Cape Verde storms, or storms that form in the central Atlantic near the Cape Verde Islands (west of Africa). These storms will have a tendency to re-curve before reaching the Caribbean and Gulf of Mexico, but will often threaten the Carolina coastline. For the past 2 hurricane seasons the U.S. has been lucky as no hurricanes made landfall, this year we may not be so lucky. WTI expects 2 landfalling storms with North Carolina at a heightened risk for impacts from a storm. Climatologically speaking, if no hurricanes were to make landfall this year, it would be the first time in over 100 years that the U.S. went 3 years without a direct strike from a hurricane. Furthermore, if no major hurricanes (category 3 or higher) make landfall this year, then that would be the first time in recorded history that the U.S. went 6 years without a landfalling major hurricane.

Retailers along the East Coast, particularly in the Carolinas, should be on guard this season as any landfalling hurricane will bring disruptions to store traffic and increase demand for emergency supplies like batteries, flashlights, bottled water, tarps, plastic sheeting, plywood, and non-perishable foods. While the threat is not as high in the Gulf of Mexico and Peninsula of Florida, retailers there should also keep an eye on the weather as a stray storm or 2 will not be out of the question.