By Martin Denholm of Wall Street Daily
"Helped by Springlike Weather, Retail Sales Beat Estimates," chirps a headline in today's New York Times.
So by that rationale, un-springlike weather would have caused retail sales to miss their estimates?
I'm always surprised by how often this weak, weather-based business journalism gets out to the masses (the
NYT wasn't the only media outlet to cite this as a reason today) – particularly when referring to retail or auto sales. Does the weather
really make that much difference to shopping habits? Seems pretty simplistic and lazy to me.
Sure, nice weather could have helped. But I can't ever recall anyone telling me they went shopping because the weather was nice. In fact, I'd have thought the opposite is true: that good weather would tempt people to do things outside, not inside. If sales had instead fallen short in February, surely the weather could be blamed for that, too!
Simply put, it's misleading. So with that said, let's get to the real story behind the solid sales figures…
The Analysts Shoot… And Miss Badly
Need proof that you should take analysts' forecasts with a fat helping of salt?
Look no further than their terrible guesswork for February retail sales.
The consensus estimate was for same-store sales (stores open a year or more) to rise by 3.4%. But the actual number raced in at 4.7% among the 18 retailers that reported results last month.
The figure climbed to 6.4% for department, clothing and discount stores, according to Thomson Reuters. And it was the industry's best performance since June 2011, according to Retail Metrics.
But anyone who thinks the weather played a pivotal part in such results is kidding themselves. Americans face real challenges from rising food and gasoline costs, plus high unemployment – all problems that the weather can't alleviate.
But discounts can!
It's All About Sales, Not Sun
February is an important month for retailers.
With the holiday season long gone, it's traditionally when stores look to clear their existing inventories in order to make room for their spring collections. And they usually do it via sales.
Take
Nordstrom (NYSE:
JWN), for example. The company's sales were forecast to rise by 5.6% for the month, compared with February 2011.