Hot weather keeping retailers happy
The slow economy, sky-rocketing gas prices and a tough job market is making things especially hard for retailers this summer. There is a sudden trend for spate of sales across retailers luring in shoppers who avoided the stores in the coldest May in six years. With suddenly increasing temperatures, the demand for fans, air conditioners, summer apparel, and cold drink has shot up according to industry consultant Planalytics, that helps retailers predict and manage the weather’s impact on sales.
According to Scott Bernhardt, CEO of Planalytics, “You had a tough spring and then suddenly a shock to the system; people were rushing out to buy these things.” The company has estimated that sales for weather specific items such as air conditioners increased by 20%, bottled water by 4%, swimwear by 6%, sandals by 9%, as compared to the same week in 2007. The highest gains took place in the Northeast.
Besides the sudden heat wave, generous economy stimulus checks given by the government, the cash registers at many retailers will be ringing and happy this summer, although consumers will start tightening their wallet again.
With most checks hitting shoppers’ hands in July, Retail Forward projects 6% year-over-year sales growth for the upcoming third quarter, half of which the company is attributing to the stimulus checks. But gimmicks like government checks are only designed to ease short-term pain, not fundamentally change the market. Beneath the uplifting near-term trends, there are plenty of signs of consumers’ cutting back.
A Lehman Brothers report issued Monday says that while 2008 may not bring a recession as traditionally defined–two straight quarters of negative gross domestic product growth–the National Bureau of Economic Research is primed to call a recession based on “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.”
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stella-sabian said,
June 20, 2008 @ 8:48 am
It is summer time. Consumers are eager to buy all goods that could save them from heat these days. Different fans and air conditioners are in demand. And it is obvious.
Shalini said,
June 24, 2008 @ 9:05 am
Sales forecasts have not been too accurate lately and actual sales figures are much stronger than expected, and that’s counting all basic merchandise as well as summer merchandise such as fans and ac’s.