David Bird, insights analyst – Weather Channel Global Media, on the impact of the weather on retail sales over the festive period
A number of clothing retailers have already reported their Christmas results for 2014. Two key themes so far have emerged: the first is the clothing sector picked up during the festive period, sales for many were over and above those of the previous year. Secondly, the growing importance of multi-channel retail at Christmas.
Weather created opportunities for UK retailers at Christmas
The mild and sunny weather over December was generally very conducive to the retail market at Christmas, across all sectors. These are the weather conditions which are generally favourable for driving footfall into stores, and they also keep consumer heating and fuel bills low, freeing up discretionary spend. Moreover, continued low interest rates in the UK and low fuel prices over the Yuletide period created an “additional tail wind”.
A generally mild, sunny, if wet, Christmas
Over most of December the weather came from the west, from the Atlantic, and UK temperatures were milder (0.5 degrees Celsius) than the seasonal average (4.4 degree Celsius). Moreover, sunshine was well above the norm, indeed it was the second sunniest December since 1929. Why is this important? Well, Nielsen estimates that 20% of all Christmas spending is done in the final two weeks before Christmas, and above average temperatures and sunny weather means shoppers head out and about.
London and South East reported warmer temperatures
While overall the UK was wetter than usual, this masked some strong variances, in part due to the Weather Bomb that hit during the second week of December in parts of Northern England and Scotland. By contrast London and the South East, where retail activity is concentrated, remained drier than the season average over the festive period.
As Kirsty McCabe, senior meteorologist at The Weather Channel, explains: “While December 2014 can be classed as a wetter than average month for the UK as a whole, that doesn’t reveal the regional detail. In fact, most of the rain fell in the north and west with rainfall totals approaching double the long-term average for parts of western Scotland. Eastern coastal counties of England actually received less than half of their average rainfall.”
Sales of outerwear grow as Brits finally move into a winter mindset
Despite the fact that, meteorologically, the weather was warm and sunny, if wet, over December 2014, clothing retailers with strong focus on outerwear and footwear finally saw a lift off in clothing sales. A number of clothing retailers have in the first few weeks of the New Year reported strong sales for the month of December and the festive period. These UK clothing retailers include Fat Face, ASOS, Debenhams, House of Fraser, White Stuff and SuperGroup and in most instances have come against a backdrop of poor quarterly results for the whole autumn period.
While there were losers as well as winners at Christmas, the key reasons behind the success of clothing sales – which usually increase when winter temperatures are below, rather than above, average – are as follows:
Year-on-year comparisons – December 2013 in the UK was even warmer than 2014 (almost two degrees warmer than the seasonal average) and, in terms of retail reporting, comparatively the weather this Christmas will have favoured the products that sell well under colder conditions.
The prevailing “weather-driven low” coming into December – consumer sentiment is dictated by weather relativity. 2014 was the warmest on record in the UK but December was the coldest month of the year. The well-documented warm autumnal weather (Halloween, for example, was the hottest ever in the UK) saw consumer demand for outerwear, fashion and footwear slow. As a consequence, as soon as the temperatures dropped – even marginally – the pent-up consumer demand was released.
The “forecast factor” – many consumers in the UK knew that wintry weather was forecast over January and February, and took advantage of surplus product availability over Christmas, amplified by the pre-Christmas sales.
Of course, the reason why clothing sells well in one particular retailer is not just a weather-driven phenomenon but is also due to a variety of other reasons: pricing, promotions, location, product stocking and availability, and increasingly the retailer’s multi-channel offering. And although weather is often cited as having a negative impact on retail sales, this Christmas at least the weather was favourable.