Holiday Retail Sales Forecast: Sunny Skies Ahead?
To all those who are still digging out from the deadly and massive “Snowtober” storm, some good news: The odds are good that there won’t be a “Snowvember” or “Snowcember.”
A good chunk of the U.S. will experience normal or above average temperatures this holiday season. And that forecast may lead to sunny sales for the nation’s retailers.
Overall cooler weather in November, combined with above normal December temperatures in the Northeast is expected and that's the perfect recipe for strong holiday sales, according to Paul Walsh, vice president of Weather Analytics at the Weather Channel.
"Overall, it looks like we're in a much better position this year than last year," Walsh told CNBC. "When you look at the holiday season. . .we have predictions [which are] indicating that overall it’s going to be cold this winter, but less cold than last winter.”
Walsh calls this the “Goldilocks effect” — no porridge here, but just a little cold and just a little warmth equals a “just right” mix that gets the American consumer into stores.
Here’s how that barometer balancing act plays out. Colder weather drives demand for apparel (think puffy coats, hats and gloves), so that could mean good news for mass-market retailers like JCPenney , Kohl’s and Macy’s.
Warmer winter weather favors increased store traffic, which provides more opportunities to sell. And if consumers are less compelled to spend money on items they need in cold weather (those coats, hats and gloves), they have more disposable income to spend on non-seasonal gift items and electronics. That's when companies like Best Buy , Radio Shack and Sears benefit.
Retailers are hoping this holiday weather shopping forecast plays out.
The National Retail Federation is predicting just an “average” 2011 Christmas season, with 2.8 percent growth in sales.
That’s way under the 5.2 percent increase retailers experienced in 2010 — and that’s with 67 percent of the U.S. population experiencing a colder than normal December. Last December was the coldest on record month for the Southeast. But even an "average" holiday season is a lot better than what retailers saw during the recession.
So what are the chances of a weekend “Snowtober” storm or a repeat of that devastating Christmas 2010 blizzard? Walsh's forecast says: not likely.
“We see there’s going to be more opportunity for people to get to the stores and the odds of having another one of these snow events on a key weekend are very low,” he said.
Okay, so maybe no white Christmas this year. But it looks like there will be some green.