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Come rain or shine – how the weather affects retail

by Maria Onyango July 19, 2012
Freshminds Insights (1)

​For the last couple of months, I've been skimming articles in the retail news that mention how 'warm weather has boosted retail sales' or how, 'suppliers benefited by unseasonably warm weather'.

At first, I read these articles with a sneer. This is London, I thought, there is the tube for god’s sake, one need never even see the sky. Who on earth would be silly enough to let a little rain put them off going outside? But then I remembered two things:

• As a sixth-former, I used to work in a shop. A lovely little independent shop in Salisbury selling handmade Indian furniture and knick knacks, on the corner of a busy high street. As soon as the first rain drops fell, it was just me, my boss, and our donuts. And if it kept raining, nobody would come. Ever.

• As soon as it starts raining, I peer outside, grimacing. I look at my son, who will need to be bundled into a hermetically sealed pram even to go to Tesco Express (one hundred metres away), and I think of that horrid damp feeling that comes with even a moment spent in drizzle. No, I decide. We will watchCbeebies.

According to theBritish Retail Consortium, the typically inclement British weather is the second largest influence on the public's spending patterns, after the state of the economy - and neither are too 'hot' at the moment, if you'll forgive the pun. So, the reports of a spike in retail sales (mostly ice-cream, flip flops and, um, more ice-cream) in May should come as no surprise. And on the other side, we should also not be surprised that the wet weather of June and July will mean a fall in sales of all stocked ‘summer’ items, from salads to sundresses – losses that can’t be covered even by the current deep discounting.

However, there is a rainbow on the horizon (sorry, sorry, can’t stop myself), as retail analysts report that department stores do well when the weather is inclement – passers by take cover from the rain in them.John Lewishas seen a spike in sales of televisions and cushions recently – showing consumers more prone to buying ‘indoor’ items that will allow them to stay out of the rain.

To combat this, supermarkets such asTescouse software to track and plot sales information for individual products against past weather for every single day of the year, spanning back several years. Which is genuinely big data. By analysing these data sets they can identify trends in spending versus trends in weather. Tesco are arguably the best supermarket in England when it comes to collection and, crucially, implementation of this kind of data. So when that rise in temperature comes one morning in July (fingers crossed), it's burgers and sun cream at the ready, poised to move down Tesco's slick supply chain. This is the apogee of retailing: to be able to predict with such accuracy, one's stock requirements and consumer needs. In fact, Tesco have claimed that their use of weather data to manage stock levels saves them £6 million per year.

And many retailers in the UK are doing just that, with some moving part of their supply chain base to the UK. A move like this means that the retailer does not have to buy so far ahead, and can react quickly to seasonal changes – it’s hoped that the financial benefits of this will outweigh the higher costs associated with a UK base. Not too reassuring for the independent little shop I worked in at sixteen - I can't imagine how the weather would prevent or encourage someone to buy a clown made of sari material, either way. But for any retailer who is selling goods with a demand level that might be weather-contingent, it's certainly worth considering what is just over the horizon.

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