Wal-Mart Loses Revenues to Bad Weather

Wal-Mart Loses Revenues to Bad Weather

A Wal-Mart in Bentonville, Arkansas blamed lower revenues on the weather.

Wal-Mart Chief Executive Mike Duke says lower-than-expected revenues in the quarter ending April 30 are due to “considerable headwinds to top-line sales.” He also said the company was experiencing a “snowfall” in reporting.  It appears that weather, in both the literal and metaphorical senses of the term, controls the market.

Unseasonably bitter weather in Arkansas has kept Wal-Mart customers away, because of their sensitivity to change.

Weather affects not only sales volume and store traffic but product selection.   When the thermostat sinks, ice cream sales decrease, and oatmeal goes up.  Clothing and footwear are more popular in the winter, food and drinks in the summer.  These relationships concur with common sense.  But studies of global climate change show correlations between the market and temperature and sunlight.  When the sun doesn’t shine, people consume more alcohol, coffee and cigarettes.  Human beings may adapt their buying to maintain “physiological homestasis.”

Mood states influence the public’s interaction with store personnel and responses to point-of-purchase stimuli, which impacts marketing communications.  Positive moods increase the likelihood that people will engage in behaviors that are expected to have positive outcomes.  A positive viewpoint makes a consumer more likely to buy, influenced not only by a current positive feeling but the memory of experiencing such feelings in the past.  It may be that a happy state of mind amplifies impulsivity and diminishes self-control.  A bad mood discourages people from shopping, or deciding to make a particular purchase, because they resist “complex decision making.”  A buyer may use mood to an evaluate how the product satisfied his or her needs.

The direct effects of weather are seen in situations in which a tornado or a hailstorm is predicted, and buyers throng to purchase supplies as if preparing for a siege.    This is termed “need recognition” by psychologists.   Mild weather may get people outdoors, but they may prefer to stay in the sun rather than face bad lighting, narrow aisles and claustrophobic conditions inside the stores.

It appears that a potent influencer of state of mind is weather, whether in its direct effects of keeping people at home or in what and how much they buy when they’re in the store.

Businesses respond to buying trends in the way they develop their advertising and marketing.

Of course bad weather has a direct impact on crops, cattle and dairy markets.  But the effects of bad weather in one area may affect what people buy in other parts of the country.  this may be linked to a tendency to apply a gloomy outlook to the current or future state of the world.  On the other hand, people often react with compassion and generosity to natural disasters, as in the case of Hurricanes Katrina and Sandy.  It will be enlightening to see if the latest devastation in north Texas will impact consumer buying elsewhere.

Written by:  Tom Ukinski

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