Weekly Weather Flash. DEC.06 DEC.19 United States. Europe

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1 Weekly Weather Flash DEC.06 DEC.19 United States THIS WEEK: The Warm Trend Across North America Challenges Seasonal Demand, but Supports Store Traffic A LOOK AHEAD: A Cold West and Warm East Drive Contrasting Demand Trends; Storms May Disrupt Holiday Shopping Traffic Europe THIS WEEK: Abnormal Warmth Persists; Seasonal Demand Is Nowhere to Be Seen A LOOK AHEAD: Still Warmer than Normal, but Not as Warm as Last Year

2 December 8, 2015 United States L ÖÖÕ QÒ ĜÖŎÖP ÓÖŘ Đ ĈĊ Temperature vs. L ast Year Restaurant Traffic +1.4% Hats & Gloves - 10% Heaters - 23% Source: Planalytics Retail implications: Temperatures that are warmer than normal and warmer than last year will continue to challenge demand for winter apparel, heaters and hot drinks. Last year, this week was the warmest since 2004: The US had its warmest second week of December last year since 2004, with below- normal rainfall and the least snowfall since Winter in the West: The Western states can expect another blast of cold temperatures later this week. Winter demand should be robust in the region. Storms are likely to continue in the Intermountain West, building early season snowpack. Still raining: Heavy rain will continue throughout the week across the Pacific Northwest, bringing the potential for flash flooding. The Plains and Midwest can expect showers late in the week. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR HEAD OF GLOBAL RETAIL & TECHNOLOGY DEBORAHWEINSWIG@FUNG1937.COM US: H K: CHN: Copyright 2015 The Fung Group. All rights reserved. 2

3 December 8, 2015 United States LÖÖÕ QÒ ĜÖŎÖPÓÖŘ ĈD-ĈĔ Temperature vs. Last Year Long- Sleeve Knits - 2% Source: Planalytics Retail implications: Markets in the eastern half of North America will remain warm, continuing to depress demand for winter clothing, soup and firewood. Last year, this week was the warmest since 2006: Last year, the third week of December was the warmest it had been since Rainfall was slightly below normal and the least seen since Return to stormy weather to hamper holiday shoppers: As the holiday shopping season ramps up, the weather will become more uncooperative. A parade of storms will push across the continent, bringing periods of rain. Precipitation is expected for most areas, but will be heaviest in the eastern regions. Snow is expected: With the increase in storms, there is potential for wintry conditions across the West, expanding into the Northern Plains, Upper Midwest and the interior of the Northeast. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR HEAD OF GLOBAL RETAIL & TECHNOLOGY DEBORAHWEINSWIG@FUNG1937.COM US: HK: CHN: Copyright 2015 The Fung Group. All rights reserved. 3

4 December 8, 2015 Europe L ÖÖÕ QÒ ĜÖŎÖP ÓÖŘ Đ ĈĊ Temperature vs. Last Year Heaters (Netherlands) Soup (Spain) SOUP Source: Planalytics Retail implications: It will be another challenging week for weather- driven sales of winter products. Abnormal warmth persists: An upper- level high- pressure system will be anchored over the continent, helping to keep temperatures in place that are much warmer than last year and normal. Much of the Southeast will also warm up, with colder air lingering only from Greece to Turkey. A bit drier: As the high- pressure system strengthens, the storm track will shift a bit to the north. Central Europe will be drier, but storms will still pound the North with wind and rain. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR HEAD OF GLOBAL RETAIL & TECHNOLOGY DEBORAHWEINSWIG@FUNG1937.COM US: H K: CHN: Copyright 2015 The Fung Group. All rights reserved. 4

5 December 8, 2015 Europe LÖÖÕ QÒ ĜÖŎÖPÓÖŘ ĈD ĈĔ Temperature vs. Last Year Knitwear (France) Heaters (Greece) Source: Planalytics Retail implications: The picture will be more mixed in terms of weather- driven demand, but seasonal shopping will be the main driver for consumers. Not as warm as last year: Temperatures will remain warmer to much warmer than normal, but will not match the unusually warm run- up to Christmas last year. Wetter weather coming: High pressure will shift to the east, allowing rain to track across the continent. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR HEAD OF GLOBAL RETAIL & TECHNOLOGY US: HK: CHN: Copyright 2015 The Fung Group. All rights reserved. 5

6 December 8, 2015 Deborah Weinswig, CPA Executive Director Head of Global Retail & Technology Fung Business Intelligence Centre New York: Hong Kong: China: Filippo Battaini Marie Driscoll, CFA John Harmon, CFA Aragorn Ho Yvonne Lau John Mercer Shoshana Pollack Kiril Popov Jing Wang Steven Winnick HONG KONG: 10th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: NEW YORK: 1359 Broadway, 9 th Floor New York, NY Tel: LONDON: Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0) FBICGROUP.COM DEBORAH WEINSWIG, EXECUTIVE DIRECTOR HEAD OF GLOBAL RETAIL & TECHNOLOGY DEBORAHWEINSWIG@FUNG1937.COM US: HK: CHN: Copyright 2015 The Fung Group. All rights reserved. 6