Sellin' in the Rain: Weather, Climate, and Retail Sales.

This article investigates how weather affects daily store-level sales for a national apparel and sporting goods brand, using a novel machine-learning based "weather index" to capture complex, nonlinear, and heterogeneous weather impacts. The study finds that weather shocks have significant and persistent effects on sales that are only partially offset by shifts between indoor and outdoor stores, online sales, or over time, implying increased sales volatility as severe weather events become more frequent under climate change. Evidence of long-run adaptation is observed for precipitation, snow, and cold weather—where sales sensitivity decreases with historical experience—but not for extreme heat events, which continue to negatively impact sales regardless of local climate history. The findings suggest firms can mitigate weather-related sales volatility by adjusting staffing, inventory, promotions, and financial reporting, while policymakers should consider the implications of increased income volatility for retail workers amid climate change.