Weather May Be Retailer's Friend This Holiday

NEW YORK (Reuters) - While unusually warm weather over the past two months wreaked havoc on U.S. retailers, a forecast for a colder, wetter holiday season could bring some relief, according to weather tracking firm Planalytics.

Unseasonably warm temperatures in September and October hurt sales at many U.S. retailers as consumers, already pressured by the slowing housing market and higher fuel costs, delayed purchases of cold-weather gear like boots, coats, and sweaters.

But Planalytics, during a holiday outlook call on Thursday, predicted a "high probability" of cooler temperatures and more snowfall this holiday season versus a year ago. The arrival of cooler weather, especially in the East, should trigger pent-up demand for winter clothing and other seasonal goods like cough medicine, soup and hot tea.

"What we're going to experience is this cold blast coming down (from Canada), and they're going to feel mighty cold when they come because we've had such a mild September and October," said Scott Bernhardt, chief operating officer at Planalytics.

There is not only pent-up demand for seasonal goods from September and October, but also from a year ago, when warm temperatures hurt holiday sales as well, the firm said.

That means consumers, who may have passed on buying a heater or snow shovel last year, might have to buy one this year.

Companies that have a presence in the Northeast and could benefit from the colder weather include department stores and specialty apparel chains like Macy's Inc (M.N: Quote, Profile, Research), Bon-Ton Stores Inc (BONT.O: Quote, Profile, Research), TJX Cos Inc (TJX.N: Quote, Profile, Research), and Limited Brands Inc (LTD.N: Quote, Profile, Research), Planalytics said.

With a colder and wetter holiday season expected, the firm said restaurants could see lower traffic than a year ago.

But Planalytics cautioned that it is not expecting the more seasonal weather to trump other external issues facing shoppers, like the slowing housing market or credit crunch.


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