Melting Business: Warmer U.S. Winter Hurts Small Companies
The big snowstorm in the U.S. Midwest and East last week was a respite for some small business owners, after a generally mild winter that has nipped into the revenue of many companies and forced them to rethink their cold-weather strategies.
Retailers who sell winter clothing or snow shovels have had fewer customers this season. Plumbers who expected to fix frozen pipes have had less work, and people who make money removing snow have had idle equipment. On the flip side, better weather means more business for companies that cater to people who want to be outdoors.
The period from December through February was the sixth-warmest winter on record, according to the National Oceanic and Atmospheric Administration, the U.S. government agency that compiles statistics about the weather. The average January temperature in the lower 48 states, which excludes Alaska and Hawaii, was 33.6 degrees Fahrenheit (less than 1 degree Celsius). That's a few degrees above the 20th-century average. And February was downright hot in some places -- nearly 12,000 local warm records were set or tied, including a 99-degree (37-degree Celsius) reading in Oklahoma.
Meanwhile, snow was sparse in many places. Chicago, which has often had 1 foot (0.3 meter) or more in February, was virtually snowless last month. The temperate weather meant dog owners didn't need warm coats and protective booties for their pooches. Hope Saidel, co-owner of the retailer Golly Gear in the Chicago suburb of Skokie, had half the normal amount of sales during January.
"When we heard the 10-day forecast was going to be up in the 60s (Fahrenheit), we thought, this is not going to be good," Saidel says. "It was devastating."
Saidel quickly changed her strategy to focus on warm-weather items like leashes, harnesses and bicycle baskets that can carry small dogs, and moved the coats and booties away from the front of the store. That helped salvage the season.
The warmer weather saved homeowners from frozen and burst pipes, but their good fortune has curtailed business for Ted Puzio's plumbing and electrical company in Roanoke, Virginia. The average low temperature in the area this winter has been several degrees above normal, according to the government figures, and revenue at Southern Trust Home Services is down about a third. The company, whose business is entirely residential, also isn't getting as many service calls as usual for heating system repairs.
Puzio can absorb the drop in revenue because his overall business is growing. Still, he notices the shortfall.
"We're not getting the bump-up we typically do," Puzio says.
Atlantic Westchester, a Bedford Hills, New York-based company that services commercial heating and air conditioning systems, makes more money when it's colder and heating systems have to work harder. But this has been the second mild winter in a row, and President Bud Hammer estimates revenue is down 15 percent from a typical season.
To make back some revenue, the company has sought work at buildings that hadn't maintained their heating systems during and after the Great Recession that began nearly a decade ago. Hammer's salespeople are contacting building managers and keeping watch for potential customers with telltale signs of trouble -- like a building that has open windows because the heating system is in overdrive.
Temperatures that the U.S. government says are several degrees higher than normal have hurt both of Tara Saxton's businesses in the Fremont, New Hampshire, area. Saxon's contracting company, KTM Exteriors & Recycling, has missed out on cold-weather work like clearing snow off roofs. It also has been unable to start on warmer-weather projects like replacing roofs and siding because temperatures that made it into the 60s (more than 15 degrees Celsius) have also quickly nose-dived. Although Saxton has been doing more interior work like kitchens, revenue is still down more than $200,000 this winter.
Saxton's other business, Maple Rock Racing, a promoter of snowmobile races, was hurt when several races had to be postponed due to lack of snow -- the second straight year a mild weather has disrupted the schedule. For the races that were held, attendance was in the hundreds, not thousands. Some sponsors already withdrew after last winter, and Saxton is uneasy about the future.
"I'm sure after this year, we'll be in a similar situation when we go calling (sponsors) this summer," she says.
But some companies got a revenue boost this winter.
At Sunnyland Furniture in Dallas, a patio furniture retailer whose sales usually slow in winter, warmer weather has enticed people to buy fire pits and seating so they can sit outside when the temperature is in the 50s (more than 10 degrees Celsius), Vice President Brad Schweig says. Shoppers are also looking ahead to spring.
"We've seen things ramp up earlier than usual," Schweig says.
Jason Askins' pool remodeling and repair franchise had an 80 percent increase in business the first two months of this year because of the warmer weather in Edmond, Oklahoma.
"People are starting to think about getting the pool ready," says Askins, whose phone at America's Swimming Pool doesn't usually start ringing until April. The extra business allowed Askins to hire seasonal workers early; he's already brought in five, and expects six more, giving him a staff of 15.
When Michelle and Frank Griffith started their food truck business, Firehouse Grilling Co., last year, they expected to take the winter off, as Cleveland usually has high temperatures around 37 (3 degrees Celsius). But the average since December has been several degrees above that, with February's highs around 50 (10 degrees Celsius), according to government figures -- warm enough to bring people outdoors to get something to eat.
"The snow blower hasn't been even taken out," Michelle Griffith says. She estimates that the couple picked up an extra 20 percent in revenue because they kept the converted firetruck operating through the winter. But they did change the menu to fit the calendar.
"We've done chili, hot chocolate, warm comfort foods," Griffith says. "I wouldn't sell chili in the middle of the summer at an amusement park."