Retail Sales Affected by Bad Weather
Written by: Lucy Miller
This winter has certainly been a cold one compared to other years. The unbearable cold weather has put jobs, school and other activities on hold throughout the season. The freezing weather has definitely ruined some of the winter fun, but now it seems it has ruined some retail sales as well. Retail sales for January were at an all time low. The MarketWatch says there was no growth at all; the weather may have paused spending temporarily. Economists expect for the lowered retail sales to rebound in February or even later. Although the weather may have driven some consumers online, it is not likely that it made up for the sales lost in the dreaded cold. Same sale stores for January fell 6.6%, compared to the same period a year ago. Furniture, food, and clothing sales all saw growth, but at a slower rate than in June.
Consumers are turning to online shopping, which may be one of the issues driving retail sales down. One of the largest impacts on the sales was the two weekends before Christmas when stores were shut down for hours due to the weather. Many departments were deeply hurt by this weather but the auto sales took it hard. Auto sales are typically low in January, yet the cold weather further ruined the U.S auto sales in January 2014. During this month the sales decreased by 3% from the level it was a year ago. All of this being said, is it worth it to suck it up and go shopping on one of those negative thirty degree days? The Economy is based on how much of an item consumers buy and how much of that item is produced. The opportunity costof not going out on a cold day may be sleeping in next to the cozy fire, but that won’t help retail sales. If retail sales are down it could dramatically change prices of ordinary things, depending on the supply and demand.
If retail sales are down that could mean some bad things for the economy. Based on my knowledge of supply and demand, things could get messy. If there is a lot of a product in stock and the demand is low, the price will reflect that, meaning the price will also be low. If there is a product that is scarce but the demand is high, then the price will rise as well. This is the very reason that businesses are having trouble after the retail sales decline. If the stores are closed they can’t sell any items. If they are open and nobody comes because of the weather, the supply grows and the demand lowers. The price ultimately would lower as well. Business owners want to sell things at a higher price and in larger quantity. The news they received in January about the retail sales was not the best news. On another note the stock market was also down in January. Technology stocks helped the market bounce back on its feet only a day after posting its worst performance of the year. The stock index climbed more than 1% and erased a lot of the loss from the day before. The marginal benefit here certainly paid off in the end.
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