This winter has certainly been a cold one compared to other
years. The unbearable cold weather has put jobs, school and other activities on
hold throughout the season. The freezing weather has definitely ruined some of
the winter fun, but now it seems it has ruined some retail sales as well.
Retail sales for January were at an all time low. The MarketWatch says there
was no growth at all; the weather may have paused spending temporarily.
Economists expect for the lowered retail sales to rebound in February or even
later. Although the weather may have driven some consumers online, it is not
likely that it made up for the sales lost in the dreaded cold. Same sale stores
for January fell 6.6%, compared to the same period a year ago. Furniture, food,
and clothing sales all saw growth, but at a slower rate than in June.
Consumers are turning to online shopping, which may be one
of the issues driving retail sales down. One of the largest impacts on the
sales was the two weekends before Christmas when stores were shut down for
hours due to the weather. Many departments were deeply hurt by this weather but
the auto sales took it hard. Auto sales are typically low in January, yet the
cold weather further ruined the U.S auto sales in January 2014. During this
month the sales decreased by 3% from the level it was a year ago. All of this
being said, is it worth it to suck it up and go shopping on one of those
negative thirty degree days? The Economy
is based on how much of an item consumers buy and how much of that item is
produced. The opportunity cost
of not going out on a cold day may be sleeping in next to the cozy fire, but
that won’t help retail sales. If retail sales are down it could dramatically
change prices of ordinary things, depending on the supply and demand.
If retail sales are down that could mean some bad things for
the economy. Based on my knowledge of supply and demand, things could get
messy. If there is a lot of a product in stock and the demand is low, the price
will reflect that, meaning the price will also be low. If there is a product
that is scarce but the demand is high, then the price will rise as well. This
is the very reason that businesses are having trouble after the retail sales
decline. If the stores are closed they can’t sell any items. If they are open
and nobody comes because of the weather, the supply grows and the demand
lowers. The price ultimately would lower as well. Business owners want to sell
things at a higher price and in larger quantity. The news they received in
January about the retail sales was not the best news. On another note the stock
market was also down in January. Technology stocks helped the market bounce
back on its feet only a day after posting its worst performance of the year.
The stock index climbed more than 1% and erased a lot of the loss from the day
before. The marginal benefit here
certainly paid off in the end.
Works
Cited
Its crazy how weather can have such an effect on multiple things throughout the world like school, some jobs, and even shopping. Some people would do anything to shop but they cant from this weather. What makes it more interesting is that people are beginning to online shop more, that's saying something since it could be the new RedBox and Blockbuster ordeal maybe. 6.6% is a largely factored drop in sales for only a month or two especially in bad weather as well. Good article and keep up the good work!
ReplyDeleteArticles like me remind me of how close minded we really are. We are sitting at home enjoying our days off not really thinking about how big of a deal these cold days off. We look at these days as gifts from God and these businesses look at these as plagues because it hurts their businesses. Even if they are already down in sales due to the time in the year they still can't afford much more of a let down in sales or else it could damage them permanently. That was a super good point with the opportunity cost though because a lot of people don't find it worth it to go out in that weather just to shop at the mall. Good informative article.
ReplyDeleteWith the drastic and frigid weather affecting many businesses and companies in where there are harsh conditions, it really does make sense of why someone would choose not to go out to shop on their free time. When the weather is as bad as it is, we really cannot blame anyone for not doing so. Who wants to go outside where it is like a frozen tundra, when you could stay inside with heating and watch television. It may not be the most logical thing to do if they are in need of something that someone would need to go shopping for, but they are thinking about their own personal well-being and trying to stay warm. Businesses take a big hit from the weather, but there really is not much that they can do about it.
ReplyDeleteI knew that the weather slowed down restaurants and shut down schools, but I had no idea that it had such a large impact on store sales and especially the auto sales. Although it's understandable that many people would rather stay inside on a day where the temperatures are in the negatives, I don't think that many people understand just how much of an impact those few cold days can have in the sales industry. I wonder if people will start to become used to the idea of solely shopping online, and eventually the actual stores will just die out? Going off of what Nick said about Redbox taking over the movie stores, could that happen with clothing stores and electronic stores too? I personally like physically going to the stores, and hope that online shopping doesn't take over the sales industry. Your article definitely had a lot of good information and got me thinking!
ReplyDeleteI was instantly drawn to this article because I could completely relate. When the weather is gross and cold, the only place people want to be is in their beds. I remember going to the mall during some of those super cold days and getting excited because there were so many spots close to the front open! In order for our economy to thrive, we need consumers to do their job - which is to consume. Our economy cannot handle decline, we need to keep it going strong. My parents own a hair salon in the brookfield square mall and they definitely suffered due to the cold weather when no one would want to leave their house! On top of that, if it isn't freezing outside, its usually snowing, which also causes a huge detriment to businesses. There is clearly a direct correlation with the weather and the economy, so let's hope the weather gets better sooner.
ReplyDeleteThis is a wonderful article to learn about. I know personally I did not and will not go out shopping on cold days. It is a weird concept to think that what the weather is like affects what the consumers buy, if they buy anything at all. I agree, this year has been the worst winter we've had in a while and the government shutting down did not help the retail business whatsoever. This was a very interesting article, hopefully spring comes soon to boost the retail sales and get us out and about!
ReplyDeleteI was really interested in your article because I found it quite relatable to my life. I actually work for Goodwill which is a retail company, and we definitely took a hit during January like many other business as you mentioned. All our products are donated and with the bad weather donations were scarce and that made it harder to produce and make store production goals. Also we are really not that busy during the week lately, probably due to the weather and so our sales goals haven't been met recently. I can also relate with the online shopping versus shopping in the stores since I did all my Christmas shopping online this year. It saved me time to do other things I wanted and still allowed me to get all my shopping done, so in a way I think it benefited myself, but I can see now how that hurts retail store sales.
ReplyDeleteI read this article not only because it interested me, but because this year I got another Job working in retail. I have noticed that on cold days, or just about any day there isn't as many shoppers as there use to be. In fact it seems that as soon as the sun falls past the horizon and we lose that extra little bit of heat the amount of shoppers in the store die as well. In the Aftermath Walmart is still successful as we are about to receive one of our bonuses, you can still tell that it is hurting us and at my other job we had to close for the entire winter because it just wasn't worth to stay open if barley any people came in. In the end winter is a beast that people try to avoid, and it may hurt the economy, but I agree that it will make up for it in the months to come.
ReplyDeleteIt is very interesting to consider the economic consequences of weather--an uncontrollable variable--and the impact, in this case negative, that it has. The power weather possess in relation to the economy seems far greater than one would assume. While the results of our recent weather are not catastrophic weather does pose a large threat. I agree that it will be very interesting to watch how it shifts the demand and supply equilibrium as the effects of increased online shopping are fully realized.
ReplyDeleteAfter reading your article it really made me think about my job and places that i've been. For example, the chocolate factory, sometimes I go in on a cold day for a sub and it is completely dead inside. It obviously hurts the business a lot! I also have a friend who works there and she get's cut from a lot of her shifts because they don't need all of the help that day; so it effects her as well. I agree that the online shopping rates will spike because no one wants to go out in cold weather. I really love that you wrote about this topic because it is something that we can all relate to.
ReplyDeleteI always knew that cold winter weather could effect the sales if retail stores. But I never thought it would be this drastic. But now when I think about it there have been lots of times where I have considered going out to buy something, and then ultimately decided not to. So it is very reasonable, when you consider how cold it really has been, to think that retail sales could have been effected this drastically.
ReplyDeleteThis is a really interesting article to read because it's easy to relate to! During the huge cold front, our house was lacking food because we didn't feel like facing the cold to go to the grocery store, so I can see how sales have gone down. It makes sense that online shopping sales went up because people didn't have much of a choice unless they were willing to damage their cars and drive to the store/mall. I never thought that the weather could have such a huge effect on the economy and sales, but you provided good evidence that proves that!
ReplyDeleteThis was a very interesting and reassuring article. I never really thought that us not going out and buying things on a cold day, would affect our economy. I actually would have thought it would help because people would be saving money. But now that I think about it, I work at a restaurant, and like every other store, we have been very slow on all of these cold/snowy days. There have even been a few times where I have been called off completely, or let off early. Now that I read this, I realize it's because our store would be losing money, because my employer would be paying more, or around the same price, for us to be working at that time, then the money we would be bringing in from the consumers. I thought this was a different way to look at this situation, good job.
ReplyDeleteThis is an interesting aspect to consider. The fact that the weather has some effect over the current market. It does make sense that people would be more reluctant to go outside and brave the cold when it would simply be easier to stay at home and order things online or rely on the items already in your household. The effect the cold front has on the state's GDP would be an interesting thing to analyse though as it would inform us exactly how much businesses were affected.
ReplyDeleteWhile reading your blog post it was very informative to learn that there is a possibility for the weather to directly affect sales of a business. One aspect that I took away from this was the fact that some of the same sale stores for January fell 6.6%. That's a lot for a business to lose within a month or so. It also makes sense that online shopping would increase because people did not want to leave their house due to the horrid weather conditions. I agree completely with everything in this blog, because I know for a fact this winter has been horrible and made many people not want to leave their homes.
ReplyDeleteI never really considered how much the cold weather affects sales in stores. The supply and demand aspect in stores has a major affect on how stores run. If the demand is high and the materials are low, the prices go up as a result. If the demand is low, and the supplies are high, the price goes down. Knowing this, I didn’t realize that the weather had such an impact on how much money stores take in during a year. When you said that the stores sales fell 6.6%, I realized how much weather dictates how many people come out to buy clothes, rather than staying inside and staying warm. This was very interesting topic and I never really knew how much stores sales are impacted by the weather.
ReplyDeleteI had no idea that the cold weather could interfere with retail prices like that. I knew schools could be effect that I had no idea that business could be effected. Maybe the stores should have a better business plan when it comes to winter. The whole store shouldn't shut down because its could outside. This is Wisconsin, and you would think that people would be use to the cold. I know the last thing people want to do on an extremely cold day is shop, but you would be surprised. Maybe the business should write a plan on what to do when it's cold, so that weather can no longer effect retail prices.
ReplyDeleteThis post really made sense to me, working in retail I know first hand how this weather affected the sales. Not having good sales was a horrible thing for the company and the stores had to make some cuts in the budget, so peoples hours were getting cut and it was an all over mess for the companies. When it comes to this weather it can be completely unpredictable so there is really nothing that you can do to plan for loss of sales. Winter is a horrible time when it comes to sales for things. No one is in the mood to buy when you can stay in side and be warm instead.
ReplyDeleteWow, this is a very important topic that you talked about I feel like because I can relate to it as well. When I work at Qdoba on the really cold days I sometimes will have no customers and get sent home because of the low income of money that Qdoba has been bringing in. So I can see how business are struggling because when I am at home during a cold day the last thing I want to go do is be out shopping and spending money. I'm usually sleeping at home curled up with lots of blankets watching movies. Also when you commented on online shopping I find that in winter it is a lot more convent because you can be dressed however you want and buy almost everything you need. Bu this was avery interesting post because the topic was both relevant and relatable.
ReplyDeleteI had no idea the weather could affect sales that much. It's crazy to think how easily we all can relate to this topic. This is very true though, on super cold days schools and businesses get shut down and at work we get sent home early because there are no customers. Winter is a terrible season for the economy. 6.6% is a lot of money to lose in just one month. I know this winter has been especially bad and maybe even made retail stores lose more money.
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