Retailers having a blue Christmas
While many of us might be dreaming of a white Christmas, no one wants it (or needs it) more than retailers, as the unusually warm weather this year has wreaked havoc on shopping patterns.
In many parts of the country, customers who traditionally rush to stores to pick up coats, scarves and gloves at the first cold snap haven’t experienced any kind of dramatic drop in temperatures yet, leaving stores with a high pile of winter apparel.
Temperatures higher, sales lower
Planalytics, which provides weather analytics for businesses, estimated that the balmy weather cost stores $185 million in lost sales in November compared with last year. And the firm projects that temps will be up 4% overall for the month of December, driven by cities including New York, Nashville, Baltimore and Chicago.
Living expenses going up
Consumers are still spending money, but instead of buying clothes, they are spending more on services; the cost of healthcare, phone services and rents have gone up. Auto insurance rates are expected to increase 3% this year as well.
This is not helpful for retailers, who are dealing with an overstock of inventory.
Markdowns to salvage losses
It be might be feasible for companies if they could just store their leftover winter apparel until next year, but the carrying cost of letting items sit in storage wouldn’t be worth it. This leaves many stores with little choice, except to mark products at nearly 80 percent off to salvage what they can from their winter losses.
Which means that retailers will be suffering, but bargain-hunting shoppers can look forward to a magical–money-saving and warm!–holiday season.