Retailers, consumers and prices
Check out the cool and wet weather that hit U.S. retailers in September as the month will go into the books as the fifth coolest in the last seven years and much cooler than last year, according to Planalytics Inc, a business weather tracking company.
While the mean September temperature in the 96 largest U.S. metro areas fell about 4 points from last year to 64.2 degrees, retailers selling rainwear (demand up 29 percent based purely on weather), pants (up 13 percent), dehumidifiers (up 10 percent) and hot cereal (up 2 percent) benefited, Planalytics said.
September also was the 11th wettest since 1961, driven by six tropical storms, including Hurricane Ike, the consulting firm said. Some cities, such as Chicago, St. Louis and Wichita, Kansas, had their wettest Septembers ever recorded, while Houston, Kansas City and Little Rock, Arkansas, had months that still ranked among the the 10 wettest.
“The tropical systems that pummeled both the Gulf and Atlantic coasts became the real weather story of the month. Despite challenging economic times, businesses that supply pre- and post-hurricane staples such as gas, ice, water, non-refrigerated foods, generators, tarps, plywood, and chainsaws experienced brisk sales in the affected areas, driven by need-based purchases” Fred Fox, Planalytics CEO Fred Fox said in a statement. “In addition, foot traffic into grocery stores, restaurants, and hotels was robust along evacuation routes.”
Check out some positive signs for home improvement stores?
Goldman Sachs raised its rating on Lowe’s to “buy” from “neutral,” citing, in part, stabilization in the housing market.
“Stabilization” might be a stretch. But Goldman noted that home sales fell 15.5 percent in July, following a 17.9 percent decline in June. The drop was the smallest since July 2007 and marked the fifth consecutive monthly improvement.
The tumbling U.S. housing market has clobbered both Lowe’s and Home Depot, so any signs that the worst might be over could be a good thing for those companies.
Relatively calm hurricane seasons in the last two years have also hurt the retailers, Credit-Suisse analyst Gary Balter said.
Both retailers historically receive bumps from hurricanes, with Katrina, Rita and Wilma in 2005 “having a measurable impact not just on near term sales trends but on rebuilding for nearly one year past the hurricane event,” he said in a research note.
Gustav, Hanna, Ike, Josephine and what is currently a tropical depression could lift sales for Lowe’s and Home Depot, he said,
“Among natural disasters, hurricanes rank as the most sales impactful because unlike major winter storms, earthquakes or tornadoes, they are predictable providing a sales lift on both sides of the event,” Balter wrote.
He did note that both companies keep prices and margins low during natural disasters, but the impact of rebuilding still works its way to the bottom line.
Also in the basket:
Apparel insiders fear death by “safe” fashion
Onward buys Jil Sander owner
Back-to-school is looking like a flop (N.Y. Post)