Weather and Consumer Demand Overview

Our Mission
We help companies make more
money by systematically planning for
the influence of weather on consumers
and business
© Copyright 2009 All Rights Reserved, G2 Weather Intelligence, LLC

Weather and Consumers
• Weather is a fundamental yet often
overlooked driver of consumer demand
• Results in unexpected upside/downside
volatility in same-store sales results
− Particularly during the high margin
spring transition season
• Easier to measure and predict than
almost any other influence on consumer
activity
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Retail Sectors Impacted
• Off-the-Mall Specialty Retail • Mass Merchants/Club Stores
• Mall-based Specialty Retail • Department Stores
• Home Centers • Restaurants/C-Stores
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Weather Considerations
• Weather impact on consumer
behavior a factor of:
− Merchandise Assortment
− Market/Geography
− Demographics
− Spending power
− Fiscal calendar
− Prior month
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Weather and Consumers
• Temperature
– Primary “strategic” demand indicator
– Departures from normal and prior year are key
– Impacts large population centers and
geographies
– Correlates strongly to sales of seasonal
merchandise
– Predictable at seasonal (year ahead) time
scales
• Precipitation/Snow
– Weekend, daytime events the biggest impact
– Traffic hindrance primarily
– High impact but not as widespread as the
impact of temperature
– Impactful events are not as predictable at
longer range time scales
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Weather and Consumers
• Hurricanes
– Traffic and demand
generator
– Biggest and most
widespread impact the result
of hurricane predictions vice
landfall
– Media coverage ahead of
storms results in a net plus
for Home Centers (HD/
LOW), Mass (WMT), and
grocers; results in a net
negative for mall-based
retailers
© Copyright 2009 All Rights Reserved, G2 Weather Intelligence, LLC

Weather Impact on March Sales
• Example of the influence of
temperature on retail sales
• Old Navy same store sales
change compared to the change
in a nationally weighted Cooling
Degree Index (weather source:
NOAA)
• Increased cooling demand
correlates to increased demand
for spring apparel
– ~40% correlation
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Weather Impact on April Sales
• Example of the influence of
temperature on retail sales in
April
• National temperature change
against the average comp store
sales of a basket of 53 retailers
(source: Global Hunter Securities
and NOAA)
© Copyright 2009 All Rights Reserved, G2 Weather Intelligence, LLC

Contact Information
Paul Walsh, Managing Principal
– Email: Paul.Walsh@g2weather.com
– Direct: +1.917.463.4238
– Mobile: +1.610.246.0623
© Copyright 2009 All Rights Reserved, G2 Weather Intelligence, LLC