Bias Disclaimer: Please refer to the post on my biases if you wish to read this post without having to guess where I am coming from.
Last week, monthly same store sales rolled in and once again we had pay for it now so I can't really try to measure the Weather Beta on retail sales. So instead we will look at these climate maps, provided by the good people at the NCDC:
The first map is weather how April 2007 ranked up as a nation based on temperature. As you will see, we were quite normal as historical April's go - 44th out of 113.
As for precipitation, the weather in April was a little drier than usual. 30th out of 113 in precipitation. Last time I checked, people didn't walk outside and say "Oh my, it's mildly dry out here - I think I won't go shopping today."
So, for those keeping score at home. As Aprils go, April 2007 was slightly cooler than normal and had below average precipitation - on a national scale.
We know better than to assume retail sales are randomly distributed with a Normal distribution - however so dry weather in the Arizona deserts would be less significant than a tornado careening down 5th Avenue. Instead, Statewide Data may tell us much more:
So it was somewhat cooler, in the Northeast and and and in the most of th Southeast and Texas was cooler than usual. Out West it was a little warmer. I went to college in the Southeast and cooler than usual in April means you wear pants instead of shorts. A very cold month in Texas may have cost retailers a few cents - and that is generous.
Precipitation by state varied as shown above. What immediately stands out is the concentration of above average precipitation in the Northeast - caused by the Noreaster we experienced for a weekend.
So now that our numbers are in, and since it has been over two weeks since it was stated allowing for the absurdity to sink in, this is what Wal-Mart has to say about the images you just looked at:
Like other chains, Wal-Mart said chilly April weather across most of the country hurt sales of seasonal goods, and rising gas prices hurt sales of clothing, home goods and other merchandise. In addition, an earlier Easter season this year drove some sales into the March five-week reporting period.
Umm...No. It was colder than usual in the Northeast, where it is sometimes cold in April and in the Southeast where it is usually quite warm and pleasant. But don't say ALL over the country - like a 60 degree day in Naples really kept people from going to the mall - it probably made them more likely to go.
Another from a Retail Analyst at Bernard Sands:
"April is a severe calendar distortion," said Richard Hastings senior retail analyst at Bernard Sands.
The only severe calendar distortion I see is that there is this analyst gets a check on the 15th and the 30th.
So what caused such low retail sales? Well, the weather of course. I'm serious.
Retail sales were hurt by the weather but NOT how they want you do think it was. If you notice in the statewide maps, the Northeast was both cooler and rainier than usual in April. We had a Noreaster which I do remember being a bit of a big deal. Let me tell you something else about the Northeast. As TBP pointed out last week and once again after the data release today, the Northeast has been skewing the housing data dramatically up 43% for the year while the rest of the country has been down. Thus, if you believe that retail sales are related to the slumping retail sales, they have been basically subsidizing the rest of the country.
So, yes a rainy weekend in April in the Northeast can hurt Retail Sales dramatically because they may not make up a portion of the country's sales, but maybe a portion of everyone else's retail sales as well.
Remember, the weather was not THAT bad across the country. All in all I would say it was decent shopping weather. Instead of a "severe weather distortion" we have a severe demographic and income distortion.
I will leave you with two more weather graphs:
These show the percentage of the country covered by both extreme temperature and extreme precipitation. If you notice, April 2007 had one of the least of BOTH. So if you believe weather mattered, the small area covered by extreme weather brought down retail sales tremendously. Notice how something as broad as weather can mask the real issue - wealth distribution and participation in economic prosperity. If you don't believe that it was weather that caused it than the consumer is starting to hurt.
Either way - although April Showers may bring may flowers - there is a shit storm looming somewhere in the horizon.
Comments