Rise of one degree in temperature in September could cost as much £40 million for non-food retailers in the UK, predicts a new study by British Retail Consortium in partnership with the Met Office.
The study takes a look at the impact of weather on sales at the whole UK level, and finds that nearly half of the variation in weekly sales growth from year to year during the Summer to Autumn transition can be accounted for by differences in temperature between years.
“For each degree warmer the first week of September is relative to the previous year, the rate of growth of Non-Food sales is reduced by 1.1%, equivalent to around £40m of sales,” reveals the report.
With temperatures expected to rise two degrees this autumn, when compared to the previous year, this could mean a £80 million hit per week to sales.
The report adds that differences in temperature can be used as a predictor of sales only at certain times of the year. The Christmas season, particularly, show little relationship with the weather. Moreover, when there is a relationship, it doesn’t always work in the same direction. Warmer weather can help sales at sometimes of year, but can hinder them at other times.
At an aggregate level, the study found little evidence for a permanent impact on sales due to temperature variation. But, as the the variation in year to year in temperature gets bigger, it is more likely to be the key driver of sales growth, it noted.