Unusually warm autumn weather across the United States and Europe is causing a slowdown in the sales of winter clothing items, including heavy sweaters and coats, just as the critical holiday shopping season is approaching. Retail executives, including those from H&M, have reported the impact of this warm weather on sales, leading some stores to implement price reductions to avoid accumulating unsold stock.
Over the past year, clothing retailers have been actively working to clear excess inventory that accumulated as consumer preferences shifted towards essential items, away from discretionary products such as clothing.
However, with warmer-than-usual temperatures expected at the beginning of the fourth quarter, retailers holding winter apparel and gear may face challenges related to surplus inventory.
Cos, H&M’s premium brand, has responded to this situation by offering a 20% discount on items like knitwear and outerwear, which includes merino wool sweaters and long puffer coats. H&M’s CEO, Helena Helmersson, noted that shoppers are postponing purchases of «heavy» autumnal items due to the unseasonably warm weather.
Pepco Group, a European company, is experiencing a similar issue. Their autumn and winter clothing inventory has arrived in the midst of a period of record-warm weather in Central and Eastern European markets. Andy Bond, Pepco’s executive chairman, emphasized the difficulty of selling coats when temperatures are hovering around 26 degrees Celsius (79 degrees Fahrenheit).
In recent years, the holiday shopping season has begun as early as October, with many retailers offering deals and discounts extending throughout the month and into December. Upcoming events, such as Amazon’s Prime Day, Best Buy’s 48-hour flash sale, and Target’s «Deal of the Day» program in October, reflect this trend.
In the United States, Weather Trends International predicts that temperatures during the October-December period may rise by 2 to 12 degrees Fahrenheit on average compared to the previous year. This warm trend, particularly from Black Friday to Christmas, may result in excess inventory and deeper discounts, impacting retailers like Walmart and Dick’s Sporting Goods.
However, retailers with agile supply chains, such as Costco Wholesale and off-price sellers like TJX, are better positioned to respond promptly to seasonal changes. Should sales of winter clothing continue to be sluggish, industry analysts anticipate significant markdowns in early 2024.
Weather-related challenges are significant for retailers, as they often plan and source products well in advance to meet customer demand effectively. Commitments to orders are typically made long before weather trends become apparent.
Retailers are witnessing unexpected success in «seasonless products» such as short-sleeve T-shirts, shorts, and lightweight clothing, all of which continue to perform well due to the warm weather.
Ultimately, the impact of weather on December sales is expected to outweigh consumer sentiment. Retailers must remain agile and adapt swiftly to changing conditions to avoid accumulating costly surplus inventory.
