The winter of 2014-2015 was a brutal one in the Northeast and Midwest, as we all know (and people in warmer climes such as Florida and California are tired of hearing.)
It was particularly tough on retailers, as a deep freeze and snowy, icy weather kept shoppers at home for extended periods of time for the second winter in a row. Macy’s (M) called out the record-breaking cold weather in parts of the country as a key reason for its lackluster first-quarter, during which comparable sales slipped.
Rival Kohl’s, (KSS) also said the weather affected sales early on, although it still reported an increase for the three-month period as a whole.
But the winter exacted a toll on Kohl’s results in another way: the department store chain said it spent a $5 million clearing snow from its stores in February alone, its finance chief Wes McDonald told Wall Street analysts on a conference call on Thursday. (The retailer still reported a better-than-expected profit for the quarter.)
“It was probably functionally a low-traffic month that was heavily hindered and hampered in certain parts of the country by weather,” McDonald said in explaining Kohl’s slow February. “That was probably the biggest issue.”
Kohl’s didn’t share how much money it spent on its stores for the whole winter, but we know the snow and cold in January and March were insane too. (Just ask a Bostonian.)
So if we assume Kohl’s spent $15 million in all for the season, a huge chunk of change considering that only half of its 1,162 are in snowy parts of the region, that means the retailer has a budget to rival that of large cities. (Many of its stores are standalone, meaning it has to clear snow in a lot of big parking lots too.)
For example, in Milwaukee, Kohl’s hometown, the city typically has a budget of about $8 million per winter.
In Chicago, which had an epic winter, Chicago’s budget for snow removal is some $20 million.
And in New York, the average annual snow budget to clear 6,000 miles of snow between 2003 and 2014 was $55.3 million (or $1.8 million per inch, for you weather nerds.)
So when retailers point to bad winter weather as a cause of so-so results, they may have a point.
[Coins2Day-brightcove videoid=4144921096001]
