Uncertain snow, looming fiscal cliff make for shaky retail outlook
By Summit Voice
FRISCO — Coming on the same day that NOAA announced that 2012 will most likely the warmest year ever in the U.S. and a study describing the cost of global warming to the ski industry, another report suggests that the climate disruption from Hurricane Sandy was a factor in an early season sales decline.
SnowSports Industries America announced that sales for the August through October period were down 2 percent compared to last year. For October alone, sales declined 5 percent from 2011.
Sales of snowsports-related gear totaled $616 million, the retail trade group said, acknowledging that Hurricane Sandy caused significant disrutopns in the South and Northeast. Uncertainty in the face of the fiscal cliff, and lack of momentum from the snow-challenged 2011-2012 season presented additional challenges.
In late October, Hurricane Sandy disrupted lives and retail sales with blizzard conditions, severe flooding and wind damage to much of the Eastern Seaboard. In the South and Northeast regions retail was shut down for days.
Sandy had a direct impact on the residences of a third of skiers and riders in the U.S. market. In fact, snow sports specialty retailers in the Northeast suffered a $14 million (26 percent) decline in October dollar sales and the South saw snow sports sales slip $6 million (27 percent).
Equipment dollar sales were particularly depressed in these two storm-struck regions, down 30 percent in the Northeast and down 44 percent in the South. It’s logical to conclude that few persons affected directly by this mega-storm were thinking about buying new snow sports equipment as they recovered from this wide ranging severe weather event.
During the past four seasons, retail sales from August 1 to October 31 account for approximately 15 percent of total season sales and tend to be indicative of momentum from the previous season; snow sports retail sales during August through October 2012 follow that pattern.
Comparing only the month of October 2012 to October 2011 (rather than the period Aug – Oct), snow sports retail sales declined 5 percent in units and 4 percent in dollars sold – about $13 million less in October 2012 compared to October 2011 for all apparel, accessories and equipment retail sales.
Apparel sales increased slightly (1 percent) reaching $161 million, and accessories sales including goggles, gloves, wax, hats and cameras fell 4 percent. October 2012 was a very difficult month to sell equipment; snowboard equipment sales declined 19 percent, cross country equipment sales fell 30 percent, and alpine equipment sales were off $4 million, or 8 percent for the month.
Traditionally, Presidential elections have a slight positive impact on retail sales, but there are more variables associated with the current political environment, most noteworthy is the wide-spread fear of falling off of the fiscal cliff in January.
Usually retail sales experience a short surge after an election as uncertainty about the future of social and economic issues is diminished. Unfortunately this Election Day did little to allay feelings of uncertainty as attention immediately turned to the impending fiscal cliff that could have severe economic impacts across the U.S. economy.
Uncertainty and the resulting fear tend to depress retail sales, particularly in discretionary spending, and may impact the snow sports retail market until the “fiscal cliff” issues are resolved one way or another. If congress fails to come to an agreement on a new national budget we expect to see sharp declines in consumer confidence and consequently, in snow sports retail sales.