Does the warmer weather really affect retail sales?

Yes, according to new research from Met Office and the British Retail Consortium, and it is warning that non-food retailers should brace themselves for the cost of an Indian Summer, which could mean they lose up to 80 million pounds per week in sales in September if the warmer weather continues.

Based on Met Office analysis of weather data, the report states that there is a "clear relationship" between temperature and retail sales, which it reiterated with previous research that revealed that nearly half of UK retailers say weather is among the top three external drivers of demand.

The impact is strongest is during the summer to autumn transition, from mid-August to early October, when warmer weather delays the purchase of autumn-winter ranges, the report reveals.

Over that period, for each degree warmer it is than the previous year, growth in sales is reduces by 1.1 percent, equivalent to around 40 million pounds per week, according to the British Retail Consortium.

Data from the Met Office shows that this summer temperatures have been on average two degrees higher than in 2017 which, if it continues this autumn, non-food retailers should brace themselves for up to a 80 million pounds drop in sales per week.

For instance, temperature differences can explain more than 70 percent of year-to-year variations in growth of men’s clothing in mid-September to early October and can reduce the rate of sales growth by 2.4 percentage points for each degree it is warmer than the previous year, equivalent to 6 million pounds a week, the Weather to Shop report states.

For women’s clothing during mid-August to early October temperature differences can reduce sales by 11 million pounds for each degree it is warmer than last year, so the changeable UK weather can have a significant impact on fashion retailers.

Warmer September could cost UK retailers 320 million pounds in sales

However, the report also does add that if September is warmer and consumers do not buy as many cold weather products, they do then go on to spend more on these products once cooler weather finally arrives. This unseasonal weather can strongly affect monthly growth figures and be easily mistaken for changes in underlying consumer confidence. It can also impact profitability, with retailers selling more stock on discount following a period of unexpectedly weak sales.

The bigger the variation in year-to-year in temperature, the more likely temperature is to be the key driver of sales growth, adds the report. During the first weeks of the year the analysis showed that the temperature is a poor predictor of sales growth, however if we only look at temperature differences of more than five degrees, then there is a “strong relationship” between sales growth and temperature.

British Retail Consortium head of insight and analytics Rachel Lund, added in a statement: “While few in the retail industry would deny that the weather impacts how we shop, the fact that this study reveals that its impact can be large and changeable only serves to highlight some of the complexity retailers have to navigate in serving consumers.

“The ability to understand and respond to unseasonable weather is clearly crucial for retailers wanting to thrive in today’s extremely competitive retail market.”

Images: FashionUnited