Retail Traffic Declines In Mid-January

Blame it on the weather, again.

It’s got to be tough being Mother Nature right now, it seems the weather is always either too hot or too cold for everyone’s — retailers and shoppers, alike — preference.

According to ShopperTrak, in the second week of January, U.S. retail traffic returned to negative territory, sinking 3.71 percent year-over-year.  Retail same-store traffic was also down, a sharp 7.34 percent year-over-year, for the week. It’s a disappointing report following a decent acceleration in store traffic, up 2.72 percent, in January’s first week.

According to Citi Research analyst Kate McShane, overall temperatures, in the second week of January, were up 0.2 degrees Fahrenheit over the prior year but 0.5 degrees Fahrenheit below normal. Snowfall, McShane noted, was 98 percent more than last year and 13 percent below normal. Total precipitation was up 36 percent versus last year and 5 percent above normal.

A major snowstorm, forecast to hit the Northeast over the weekend could be another potential retail traffic disruption, noted Cowen & Co. analyst Oliver Chen.

Before temperatures across the country finally turned colder in January, brands and retailers had complained that they struggled to move seasonal merchandise, such as knee-high boots and coats, due to an unseasonably warm November and December.

Now, as temperatures swing in the opposite direction and winter storms begin to arrive, some retailers fear shoppers — who now feel the urge to purchase winter gear — will find themselves unwilling to brave the dismal weather and hit brick-and-mortar stores.

Online shopping continues to rise in popularity and experts suggest, if the trend continues, it could become the preferred method for both consumers and companies.

Cowen & Co. forecasts traffic to be down again, 5 percent to 7 percent year-on-year, in January’s third week, with weather again playing a significant role.

“We expect the post-holiday shopping period should likely return to a steady negative mid-to-single-digit to negative high-single-digit run rate,” Cowen & Co.’s retail team noted. “According to [Weather Trends International], temps will trend lower than last year and below normal for the first time since August 2015.”

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