Cool October Could Signal Good Christmas for Retailers

The manager of the J.C. Penney store in Fayetteville’s Northwest Arkansas Mall said October sales had increased significantly over last year, and cool weather was a primary factor.

The average temperature last month was 3.6 degrees cooler than usual in Fayetteville, and that sent customers shopping for sweaters and coats.

“We had three days in a row of frost,” Redford said. “We had lows of 27, 32 and 30 on the 14th, 15th and 16th … It was so easy to sell a coat, it was like taking candy from a baby. I tell you what, this October has turned me into an optimist.”

The average temperature in Fayetteville was cooler than usual for 20 out of the 31 days of October. The average temperature was below normal for all but three days in the last half of the month.

According to the National Weather Service, Fayetteville’s average high temperature in October is 71, and the average low is 47. The average mean temperature is 59. The low of 27 on Oct. 14 broke a record.

Nationwide, October was cooler than average nationwide, and J.C. Penney Corp. posted a sales increase of 13.3 percent to $1.2 billion for the company’s Penney’s department stores. Same-store sales increased by a whopping 13.7 percent. For November, however, Penney’s said in a press release that it’s on plan to show flat same-store sales or a slight increase compared to November 2001 because of a late Thanksgiving this year.

Wal-Mart Stores Inc. of Bentonville also cited cool weather for strong apparel sales in October.

October revenue for the world’s largest retailer increased by 11.3 percent to $18.5 billion. Wal-Mart’s same-store sales increased by 3.7 percent.

At His Fingertips

Redford keeps www.weather.com, weatherunderground.com and accuweather.com bookmarked in his computer.

By tapping a few keys, Redford can tell you in seconds that the high in Fayetteville was 75 degrees on Halloween 2001.

He can also tell you that 75 degrees is a Halloween in retail hell and the months of October and November 2001 were too warm in general.

A sweltering fall followed the September 11 terrorism, and retail sales didn’t recover during the Christmas shopping season, which unofficially begins each year on the day after Thanksgiving.

People don’t usually shop for coats when it’s 75 degrees outside.

“The weather impacts business,” Redford said. “Tell me what the weather is going to be like, and I can tell you what sales are going to be like …

“I track the weather because I have to explain to my district manager, ‘Why did you have a 20 percent increase [on a particular day] last year and a 10 percent decrease this year?'”

The weather can make that kind of difference as well as whether the Arkansas Razorbacks football team in playing in Fayetteville that day.

“A retailer’s dream is early seasons because that’s the way the [apparel] assortment starts to come in,” Redford said.

“There’s a definite correlation [between the weather and apparel sales],” said Claudia Mobley, director of the Center for Retailing Excellence in the University of Arkansas’ Walton College of Business. “It’s a well documented fact that if fall is cool early, sales of coats and sweaters will be good. If it’s warm early in the spring, swimsuits sell well. Weather can make a huge significant difference in what your sales do. You can also have inclement weather that can shut down retail stores. It’s a real crap shoot. We wish we had a crystal ball.”

Last year, retailers in Northwest Arkansas were marking fall clothing down to discount prices way before Christmas. This year, retailers are selling much of their fall inventory at full price.

Andrea Taylor, marketing manager for the mall, said sales were up “in general” for October, not just for apparel sales, but she wouldn’t give specific numbers. Taylor said many stores are hiring as many additional employees for Christmas as they did last year, if not more.

Below the Belt

Despite a plunge in the nation’s consumer confidence and sluggish retail sales in other sectors, Redford said sales at his store increased significantly in October. He wouldn’t divulge sales numbers or the percentage increase.

Of course, that increase is compared to the month after Sept. 11, 2001, when sales were down sharply. But Redford said sales in October 2002 more than made up for the decline in October 2001.

Redford said he has noticed a phenomenon in an area he calls the “October/November belt,” a swath of middle America from Kansas City through Little Rock that includes Northwest Arkansas.

Frequently, if October is cool, November will be warm in the October/November belt and vise versa, Redford said.

In the fall of 2001, area retailers were in for a double disappointment.

“Last year, we had warm/warm,” Redford said. “It was too late to start the winter shopping season … It was a retailer’s nightmare.”

Although he likes for the weather to cool off early in the fall, Redford said rain and snow keep customers away from the mall.

“People kind of hunker down when it rains,” he said, “unless it’s the weekend of the War Eagle Arts & Crafts Fair. If it rains that weekend, then people go to the mall.”

A 30-minute blizzard hit Fayetteville on Saturday before Christmas last year, and customers scurried home from the mall, almost causing a traffic jam in the parking lot, Redford said. That put a dent in sales figures for the holiday season.

Redford said October isn’t one of Penney’s biggest months “dollar-wise,” but it is a harbinger of the Christmas season.

As of July 27, the company had 1,068 J.C. Penney department stores in the United States, Puerto Rico and Mexico, and 54 Renner department stores in Brazil. That’s in addition to 2,642 Eckerd drugstores that Penney’s owns throughout the United States.

David Gerdel, manager of the Dillard’s Department Store in the Northwest Arkansas Mall, said sales were up in October, but he wouldn’t give any specific numbers.

“We had a good month,” Gerdel said, “the best we’ve seen in a while. Our coat sales were up.”

Managers of the Old Navy clothing store and Bed, Bath & Beyond said sales were up in October, but neither of them wanted to be quoted. Both stores are in a strip center in the CMN Business Park just south of the Fayetteville mall.

A manager at the Kohl’s department store in Rogers said sales were up in October, but he declined to comment further.

Malls Slipping?

In some large cities, it appears that malls may be out of fashion. Strip centers and stand-alone stores like Wal-Mart, Target and, frequently, Old Navy appear to be cutting into mall profits. Shoppers who are too busy to park and walk through a large mall are hitting the strips and stand-alones instead.

But Redford said that doesn’t appear to be happening in Fayetteville. The Northwest Arkansas Mall is still small enough for shoppers to find a parking space and get in and out quickly, he said. (Of course, the Christmas season could be a different story.)

In October, four retailers blamed poor sales figures on malls. Whitehall Jewelers Inc., Footstar Inc., children’s clothing maker OshKosh B’Gosh Inc. and jewelry chain Zale Corp. all cited poor mall traffic for sluggish sales.

Retail consultants say shopping is becoming less fun and more of a chore. On top of that, the slowing economy, threat of war with Iraq and concerns about a terrorist attack make for what could be a Christmas only a Grinch could love.

Companies like Wal-Mart have been making it easier for shoppers to buy a few items on the way home from work and not have to deal with the hassles of a mall. Wal-Mart Supercenters stock groceries, and if customers are intimidated by those 200,000-SF stores, many (particularly in Northwest Arkansas) have the option of shopping at a 40,000-SF Wal-Mart Neighborhood Market instead.

Many fans of the traditional American downtown shopping area blame malls for suburban sprawl and the death of downtowns. Since malls began dotting the U.S. landscape in the 1960s and ’70s, Wal-Mart has become the world’s largest retailer by following a similar strategy of big-box stores on the edge of town.

CBS Marketwatch, an Internet business Web site, reported on Nov. 1 that there’s a trend toward shopping areas that feel more like small-town America.

“People today have a stronger sense of nostalgia than they did in the 1970s or 1980s, sending many back to open-air retail centers that have more of an old-fashioned downtown feel,” CBS Marketwatch reported.

“The trend is to open-air centers that look more like villages, with real streets with cars and real sidewalks where real people can shop. What a concept!” James Porter, a partner in the Los Angeles architecture firm of Altoon + Porter, told CBS Marketwatch.