May 22, 2014
Ronald Friedman, Co-Leader, Retail/Consumer Products Industry Group, Quoted in Fortune Article, "Weather a Popular Scapegoat as Retailers Disappoint."
By John Kell
Executives at some of the top U.S. retailers have leaned on a familiar scapegoat as they unpack why first-quarter sales have broadly missed Wall Street's expectations: bad weather.
And how many times have they complained about the weather this quarter? A lot, according to an analysis of their conference calls.
Retailers are notorious for blaming disappointing sales on weather fluctuations. In any given year, it can be too cold, too hot, or even too wet, to reach expectations.
"This is the first time weather has been a factor for six to seven months," said Ron Friedman, a consumer products consultant for accounting and advisory firm Marcum LLP.
Retailers buy inventory months in advance, and thus have limited flexibility to respond to weather fluctuations. Friedman said Home Depot, Lowe's and Staples Inc. (SPLS) are among the retailers that are better positioned when the weather is poor. According to Friedman, those retailers can use a system known as "rapid replenishment," a process that allows them to place orders as needed from suppliers for basic items such as lawn mowers, shovels and office supplies.