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Retailers are feeling the heat yet doing better than expected as they weather triple-digit temperatures in the West.
This story first appeared in the July 2, 2013 issue of WWD. Subscribe Today.
The intense heat spurred strong sales of certain categories while hindering others, though the demand for seasonal goods such as shorts, T-shirts and polos wouldn’t have been strong anyway this late in the year, retail experts noted Monday.
Several malls reported solid traffic, but often it was later in the day, after people returned from the beach. Traffic could pick up again soon as major chains shift into heavy clearance mode starting with this week’s Fourth of July sales and continuing with storewide semi-annual sales later in the month as they transition to back-to-school and fall goods.
As the thermometer started rising to record-breaking levels, Target said last week it saw an increase in demand for fans, air conditioners, water and sports drinks in the West and Southwest, while Macerich Co., a major developer based in Santa Monica, said its centers, such as Santa Monica Place in Los Angeles, which is two blocks from the beach, were crowded with people coming back from the beach or those just seeking someplace cool.
“Our traffic is up significant double digits over a typical week,” said Nicole Flynn, assistant vice president of marketing for Macerich’s Southern California properties.
“While people in Arizona are used to high temperatures in the summer, we’re not used to 119 degrees in June,” added Sherry DeCovich, assistant vice president of marketing for Macerich-operated centers in Arizona. “Naturally, people here are looking for cool places. Water features at our outdoor properties are especially popular now. The splash pad at SanTan Village in Gilbert, Ariz., has more than 100 children playing there every day, particularly in the mornings and early evenings. In general, retailers at our Arizona properties are reporting strong sales in sleeveless tops, shorts and sandals. Eddie Bauer at Flagstaff Mall reported water bottles were among the top-selling items this past weekend.”
“Warm weather doesn’t really slow us down much — it’s rain that is more of a deterrent,” said Stacie Ellis, senior director of marketing at Irvine Company Retail Properties. “At Fashion Island in Newport Beach, we’re fortunate to be located so close to the Pacific that the temperature rarely gets unbearably hot and guests can enjoy ocean breezes while they shop. It was in the 80s this weekend for Newport Beach — nothing to complain about. Our guests at both Fashion Island and Irvine Spectrum Center have other ways to beat the heat while they’re shopping at our open-air centers, too: They can duck into our air-conditioned movie theaters, and there are pop-jet fountains for the kids.”
In Portland, Ore., where temperatures averaged unusually warm levels in the 90s, Portlanders sought relief inside shopping centers and typically stayed longer than they would normally, with dining out, said Rebecca Lesley, senior marketing manager of Washington Square in Portland. “Many retailers that started their July Fourth promos early benefited selling down summer merchandise before fall shipments start to arrive later this month,” she said. “Families stocked up on children’s summer basics, including shorts and swimsuits. Women’s [summer] maxidresses also continue to be in high demand.”
“This past weekend was really great in terms of sales. One of our best yet. I guess the heat wave had a positive affect,” said Alicia Polmanteer, spokeswoman for the Southern California retailer Planet Blue. “We found a lot of our customers were in the stores buying up our Fourth of July-inspired pieces and swimwear. Our Missoni towel range just dropped in-store and was a big success over the weekend. Seems like the bohemian fashion crowds made pit stops at our Malibu, Santa Monica and Venice stores before hitting the beach.”
Craig Johnson, president of Customer Growth Partners, said nonapparel categories were most favorably impacted, like fans and air conditioners. Places like Home Depot, Lowe’s and Best Buy, mainly in southern California and metropolitan Los Angeles, were running out of stock.
“At the malls, things were very quiet earlier in the day Saturday and Sunday because so many people went to the beach, but towards the end of day people started going to the malls, which got quite busy,” Johnson added, citing the Glendale Galleria and Beverly Center among other major malls in Los Angeles.
“The single biggest winner was Old Navy because they did this $1 flip-flop sale. It was really like holiday-level traffic. Old Navy also scored big promoting tanks starting at $2, Ts starting at $5 and shorts from $8 and up….Teen retailers did well selling girls’ short shorts and tops with open lace and crochet,” he said. “Department stores were OK but not great. Misses chains didn’t do well.”
Retailers selling consumables, such as water or Gatorade, restaurants, coffee chains like Starbucks, and movies fared best in the West, according to Evan Gold, senior vice president of client services for Planalytics Inc., a consulting firm that helps retailers plan their assortments based on its weather forecasting.
Several records were set last weekend, with Palm Springs reaching 122 degrees; Las Vegas, 115; Salt Lake City, 103, and Houston, 107. “The triple-digit temperatures will dissipate,” Gold said. “It will cool down as we get through this week.”
Officials in several states were warning people not to engage in hiking and other forms of outdoor exercise.
Catherine Nation, executive vice president at Johnny Was, said, “All of our stores are performing well. Of course, at this time of year, we offer more buy-now, wear-now that caters to this type of climate. We are seeing higher foot traffic at the coastal stores in Santa Monica Place and Fashion Island, an obvious respite from the heat. We opened in Scottsdale at the end of May and had one of the best days when it hit 117. I suppose the [air conditioning] is key at that center.”
Melissa Richardson Akkaway, who owns Beckley boutiques in Los Angeles and Las Vegas, saw a spike in traffic in her Las Vegas store when temperatures reached 117 on Saturday. “I was born and raised in Las Vegas and I can’t remember a spike this high in years,” said Akkaway, whose store is in the Cosmopolitan Hotel. “I think visitors want to be by the pool but they end up taking cover inside because it’s too hot, or they don’t go outside at all,” she said.
There were industry concerns beyond just the consumer traffic. “We take associate safety seriously and have provided information for review with our U.S. associates that discusses working in summer conditions when the temperature rises,” a Wal-Mart Stores Inc. spokesman said. “This would include such things as monitoring local weather conditions, planning strenuous tasks in the morning and evening with moderate tasks during the heat of the day, communicating where water and sunscreen are located for associates’ use and checking on associates periodically during their shifts.”
While temperatures may ease over coming days, the heat wave, especially the lack of rain in Texas, could have longer-term implications. There was some concern about cotton crops being affected. “California and Arizona are minor producers and all cotton is irrigated, so the impacts of the heat wave on the West Coast are not great on the world cotton outlook,” said Terry Townsend, executive director at the International Cotton Advisory Committee.
Townsend did note if the drought in Texas is prolonged, “U.S. cotton production will shrink and prices will rise,” he said. “So far, most estimates of U.S. cotton production have already been reduced and now stand at 13.5 million bales, a reduction of 22 percent from last season. The longer the heat wave, and drought, continue, the lower production will shrink.”