Chilly March gives retailers frostbite
Cold weather across the US brought slumping sales for many stores as shoppers shunned spring clothing and outdoor goods.
Gap (GPS) might want to have a word with Punxsutawney Phil.
Despite the famous groundhog predicting an early spring this year, much of the U.S. was hit by colder-than-usual temperatures and snowstorms in March. As a result, fewer shoppers shelled out for new spring fashions, given that shorts and flip-flops aren't all that comfortable amid subfreezing weather.
"March is a bit of a lost month for retailers," Stifel Nicolaus analyst Richard Jaffe told Advertising Age. "In April, they'll make every effort to catch up, but I don't think they'll fully catch up. They will have to take markdowns."
Jaffe last week reduced quarterly and annual sales estimates for top retailers, including Kohl's (KSS), Gap, American Eagle Outfitters (AEO) and Aeropostale (ARO), citing the cold March weather as the culprit.
Adding to the pain, retailers will be facing tough comparisons to March 2012, when the country saw record warmth, notes CNBC.com.
Take shorts and sandals. Demand fell 12% and 9%, respectively, for those clothing items last week, according to Planalytics, a company that examines how weather trends affect consumer buying, CNBC notes.
And clothing retailers aren't the only ones feeling frost-bitten. Home-improvement stores are also witnessing a pullback in buying compared with last year, when warmer weather sent homeowners into the garden aisles in search of mulch and plants.
Some companies have already issued warnings about the weather. Children's Place (PLCE) on Tuesday said the cold temperatures and still-tough economic conditions are causing consumers to cut back on spending.
Nevertheless, some retailers have seen stronger business. Drugstores and dollar stores notched a bump in sales, CNBC notes, citing the International Council of Shopping Centers.
When the weather is freezing and consumers are feeling lousy, Tylenol and $1 packets of ramen are apparently what they turn to. "When times get tough is when the customer needs us even more," Dollar General (DG) Chief Executive Rick Dreiling said on a conference call last week.
There comes a time when people just don't need to buy more stuff. Also, retailers need to know that many of us are not buying because everything says it's made in China. In my opinion they can sit on that stuff forever.
I moved to Europe 3 years ago because of my work status, and I no longer have to wear junky shoes made in China, or purchase anything else made there. Why are the retailers selling shoes that cost less than $10 to make for $50 and more. Has the American public become smarter recently and stopped buying this junk?
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