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Weather Takes a Toll on June Sales and Dealer Confidence

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More retailers reported declines than growth for June when responding to a survey, with 59 percent saying trends had worsened since May, and 25 percent saying they’d improved. With about 60 percent of the season in the books — June accounts for around 13 percent overall — the hope for a weather-related bump to catch up on delayed sales seems unlikely, Baird analyst Craig Kennison wrote.

“Dealer commentary reads incrementally cautious, and sentiment reflects worsening trends,” Kennison stated in the Pulse Report, a monthly survey conducted by Baird and the Marine Retailers Association of the Americas in conjunction with Soundings Trade Only.

Dealers said weather had created the largest negative impact on sales, with 58 percent saying it had deterred sales in the first half of the year. Only 8 percent said weather had been a positive factor. Though the impact was bad in both quarters this year, dealers said the second-quarter impact was greater.

“Weather isn’t much of an issue in the first quarter because people aren’t anticipating boating during that time anyway; it’s about the upcoming summer,” one respondent wrote. “Once boating season arrives, sunshine is the biggest driver of traffic. We are in a resort community, and if rain is forecast for the weekend, people simply don’t come to town. We are still holding our own, but the cushion we built in the first quarter is getting very thin as we close out the second quarter.”

One dealer said there had been only three boating days in his market by mid-June. Another said it rained for six consecutive weekends in the second quarter. Several mentioned a cold and wet early half of the year in the Northeast.

Excessive rain and flooding not only slowed sales, but also affected current boat owners, one retailer stated. “Our areas are still flooded, and many boaters still have their boat in storage and may not use [it] this year,” he wrote.

Tariffs also were top of mind for those responding to the survey. “A typical retail customer comment: ‘I’m not buying anything until the tariff issue is resolved; my investments hinge on a good outcome, and it is now in jeopardy,’ ” one dealer wrote. “Trump has disrupted many industries besides farmers. Why do farmers get a Trump special subsidy and boating does not?”

Another dealer agreed that customers were increasingly citing government uncertainty and trade actions, “aka tariffs,” as reasons not to buy.

Dealer sentiment about current conditions fell sharply from 40 in May to 25 in June, an all-time low. The three- to five-year outlook dropped from 39 to 36 in that same time period.

Seventy-three percent of dealers reported that inventory in June was too high, versus 6 percent that said it was too low. “Dealers need to stay on their toes and be careful about taking too much,” one wrote.

Kennison said the belief was that trends would improve after the year’s slow start, “but with about 60 percent of the season now complete, it is becoming more likely that sales are missed versus delayed, meaning any pickup in demand is unlikely to move the needle for 2019. While weather is an issue, commentary this month also reflects broader concern on the economy, consumers and trade negotiations.” 

This article originally appeared in the August 2019 issue.

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