2022-2023 Winter Weather Influence on Consumer Behavior

December 13, 2022
by Krissy Klinger, SVP Client Services & International Business Meteorologist at Weather Trends International

For some retailers, when the weather outside is frightful, sales can be quite delightful. This is especially true during the winter season. Savvy retailers know that the weather is directly related to consumer behavior. While this is true year-round, the specific relationships between weather and consumer behavior change with the seasons. In the Summer, warmer weather is favorable for retail sales, while colder weather tends to be more favorable in the Winter. A colder and snowier start to the winter of 2022-2023 sets the stage for an overall favorable 4th quarter in the United States. However, before analyzing the outlook for the winter season, weather’s impact on consumer behavior must be understood.

Analyzing Weather’s Influence on Retail Sales

There is little doubt that sales of things like coats, hats, and gloves increased when temperatures dropped in mid-November 2022 following a warm start to the month. National weekly average temperatures took a nosedive from the week-ending November 5th (58°F) to week-ending November 19th (40°F). While temperature changes over the span of a few weeks can certainly lead to a surge in seasonal category demand, the year-on-year (YoY) change in temperature is a much more meaningful metric.

Why are YoY changes in weather so important? For one, many retailers, and their suppliers, plan their business using last year as a baseline. Last year is the closest proxy available to avoid compounding complications from factors such as changes in population, competition, and the macroeconomic environment, to name a few. Utilizing YoY changes also removes seasonality from the equation as a 10°F drop in temperatures in December is going to elicit a different response in consumer behavior than a 10°F drop in June.

By matching weather and sales history from the same period, analysis can be performed which quantifies the relationship between specific categories and weather. From this analysis, the impact that a 1°F change in YoY temperature has on seasonal category sales is determined.

For example, a -1°F YoY change in weekly average temperature would translate to a +2% increase YoY for cold and flu medication sales. Alternatively, a +5°F YoY change translates to a -25% decrease in women’s outerwear sales. This sales versus weather relationship becomes quite powerful when used in conjunction with weather forecasts providing future insights on consumer behavior.

Favorable Weather Outlook for Winter 2022-2023

Although November 2022 was warm to start, temperatures cooled significantly by the middle of the month resulting in YoY weekly average temperatures that were -10°F colder than last year, nationally. In the Northern Rocky Mountains and the South-Central regions, temperatures trended as much as -21°F and -16°F colder than last year, respectively. Snowier trends in November, especially across the West, may have caused temporary foot traffic disruptions but the snow was favorable for sales of high-ticket items like snow throwers and heavy outerwear.

The holiday shopping period, from week-ending November 26th through week-ending December 31st, features colder YoY trends for a majority of the period, nationally. Colder weather leading up to the holiday is especially favorable for categories like outerwear and electric blankets, which are popular seasonal gift items. As a bonus, the early season cold helps to drive more full-price sales and leaves lower inventory levels for end-of-season promotions which typically take place in January and February.

Majority of Holiday Shopping Season Trending Colder Than Last Year

Majority of Holiday Shopping Season Trending Colder Than Last Year graphic

Note: Gray bars indicate weekends.
Source: weathertrends360.com

With the overall colder weather patterns expected to continue through the end of December 2022 and into the first part of January 2023, the outlook for winter seasonal category sales is positive. Inflationary pressures are tightening consumers’ purse strings, but this means that must have categories, like coats, may tend to outperform discretionary items, like electronics.

In the latter half of January 2023 and continuing into February 2023, warmer YoY trends will become more prevalent according to forecasts from WeatherTrends360. Warmer YoY trends combined with higher early-season demand should result in a downturn in winter seasonal category sales. Consumers that purchased coats and heaters in a cold November and December simply do not need to buy another one later in the season. Profit margins will need to be sacrificed to move any remaining seasonal merchandise, although thanks to the favorable earlier winter weather, inventory levels should be low.

Compared to last year, seasonal sales should be weaker across much of the US later in winter. However, this is likely to be more of a problem for winter consumables that commonly need to be replenished, like body lotions and hot beverages, than apparel items.

For the season overall, the weather for the winter 2022-2023 season is trending favorably for retail sales. Strong seasonal category sales in the front half of the season, including the critical holiday shopping period, will be a positive driver for 4Q sales. By late January and into February 2023, warmer YoY temperatures combined with earlier season demand will likely dramatically soften sales for cold weather merchandise.