Retailers are at war with the weather.
Already reeling from the winter that wasn’t, many stores in Canada now find themselves struggling to match their inventory to the spring that came too soon.
Tom Johnson, co-owner of Tall Tree Cycles in Ottawa, delayed bringing in new stock at his Ottawa bike store this year because last year’s spring was so “horrible.”
“Now because of the early start in the season, there are long wait times for certain bikes,” said Mr. Johnson, whose sales are up about 10 per cent this month from a year ago. “We can’t keep up. Orders are coming in. You’re filling them but you can’t get the new product on the floor to show it.”
The inability of some smaller- to mid-sized retailers to get shipments into stores faster comes after already suffering through poor sales last spring in cool and rainy weather, prompting some to delay or scale back inventory purchasing this year.
And larger retailers, though better positioned to respond to inventory challenges, are racing to recoup painful losses from a mild winter that melted away sales of such items as coats, boots and snow blowers. Anticipating a cold, snowy winter, many merchants were forced to clear out merchandise at heavy discounts, slashing profit margins.
For retailers of all sizes, the pressure to keep up with fickle weather patterns highlights the challenges of planning merchandise and reacting quickly to shifting demands in order to stay competitive.
Today, retailers are enjoying a welcome lift in sales of shorts, sandals and other warm-weather merchandise – up as much as 30 per cent or more in some categories from a year earlier. But keeping up with demand has been a challenge, especially for smaller players.
Part of the challenge is that retailers make many of their purchase orders six to nine months in advance, with little flexibility on deliveries from overseas.
“We’ve been working with our suppliers to try to get delivery dates moved up,” said Steven Cross, owner of Threads Lifestyle, an outdoors clothing and gear store in Toronto. “The biggest challenge is just having the goods on the floor.”
Mr. Cross, whose store is enjoying double-digit sales growth this month, said he “just gave up on winter” in early February and ran heavy sales of up to 70 per cent off to clear out inventory, which wiped out profits. On the flip side, he’s brought out many spring products 60 days earlier than last year – and 30 days earlier than he typically does – which is bolstering his bottom line.
Large chains, such as Wal-Mart Canada Corp., Sport Chek (owned by Canadian Tire Corp. ) and Rona Inc., say they’re in good shape to profit from record temperatures in much of Canada. But after having missed out on many winter sales, they’re now racing to bring in spring inventory to help cut their cold-weather losses.
“Demand is up, whether it’s consumables like water and sport drinks or … T-shirts and sandals and shorts,” said Evan Gold, a senior vice-president at Planalytics Inc. in Philadelphia, which advises retailers such as Canadian Tire, Starbucks and Payless Shoes on business weather intelligence.
“From a retailer perspective, they may be struggling individually, retailer to retailer, to make sure that they have enough product in the right place. … But over all it’s been good.”
This month so far in Canada, retail sales of T-shirts have shot up 16 per cent, women’s capri pants, 21 per cent, and barbecue supplies 33 per cent from the previous year, according to Planalytics. Restaurant traffic gained 3 per cent while retail traffic over all rose 5 per cent. Still, retailers wrestled with declining winter sales – boot sales fell 20 per cent, outerwear dropped 17 per cent and snow removal products fell 24 per cent, Planalytics data show.
The early spring hasn’t arrived in all parts of the country. In Vancouver, retailers are still operating in cool conditions, Mr. Gold said. “They’re still getting rid of winter product and the spring product isn’t moving.”
Spokespeople at most large chains said they’re generally ready for the warm spell. “We’re set for customers in nearly all of our seasonal areas, including patio furniture, barbecues, and lawn and garden tools and products,” Home Depot Canada’s Michael Langdon said in an e-mail. “We even have live goods available in certain Western Canadian markets.”