It is almost summer but you wouldn't know it by the weather. Next week, the season officially kicks off and the week is expected to be the second coldest, and driest first week of summer in 15 years! Right now the one refrain apparel/retailer CEOs seem to universally repeat is the importance of clearing out inventory over the next few months as stores get ready to restock shelves with back to school items.
BonTon's CEO told me that you don't want to see strong sales gains in July because the sales are markdown generated and the importance of the month is to clear out old products. How the weather fares will be a big part of what sells. Bill Kirk at Weather Trends Internationalgave us a glimpse of what he's advising clients like Bon-Ton and Wal-Mart.
Weather Trends is advising its retail and manufacturing clients to "really push hot weather items" this week and next as "excess inventory is a concern beyond the holiday weekend!" The summer hasn't even officially begun and retailers are worried about getting rid of the summer clothing! After July 4th, sales of "hot" items will cool off BUT patio furniture, suncare and anti-itch products will be flying off shelves due to drier weather. Why is it important to play weatherperson?
Gaming the weather, having just the right product on the shelves at exactly the right market at the opportune time can make a real difference in retail sales results. Wal-Mart watches this VERY carefully and stays in immediate touch via computer with major suppliers by sharing sales data to replenish those popular items that are selling. Right now, the world's largest retailer is maintaining its 0-2% same store sales guidance for June. According to Thomson Financial, the overall discount category is on track to slightly miss the 2.3% sales gain reported in June 2006. For far for the first week of June, overall sales for retailers are coming in at a 2.4% gain, slightly lower than last year's 3.0%.