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Retailers to face more disruptions due to climate change

By Don-Alvin Adegeest

Jul 28, 2021

Retail

Image: Pexels

Variable weather affects footfall, with retail destinations just one of the many businesses impacted by severe climate change.

During heavy rains, urban locations like high streets see a decline in visitors, whereas shopping centres and retail parks see potential rises. But this is just in the UK, what about the heat, rain, cold and disrupted weather patterns elsewhere in the world?

Just last week the heavy rain that impacted Germany, Belgium and the Netherlands saw the highest levels of rainfall in July since records began in some regions. A recent study published in the scientific journal Nature Climate Change concludes that record-setting weather events whether it is catastrophic rain and floods or a severe heatwave will happen more frequently and with greater severity in the years and decades to come. Local shops and brands with physical stores could be particularly affected.

Larger retailers, those with a global presence and big supply chains, may be part of the problem. According to Retail Wire, retailers have begun to act with varying degrees of urgency in cutting greenhouse gas emissions and addressing the environmental impact of their operations, as well as that of suppliers. But it may be too little too late.

In the recent heatwave that engulfed the Pacific, Amazon gave its warehouse workers ice scarves so they could continue working during the heatwave. Some workers left early due to the strain of working under the adverse conditions.

Back in 2014, Andy Street, John Lewis Managing Director said: Weather has had a greater effect [on sales] than economic numbers, we’ve known that forever.” In that year, John Lewis saw fashion sales fall by 13.1 percent and 6.9 percent over two weeks in mid-September, while sales at Marks & Spencer fell 5.3 percent. In the same season Superdry adjusted its full-year profits of 60-60 million pounds compared to a previous forecast of 69-73m pounds after a drop in sales.

Daily variations in the weather may be easier to master for stores but are still equally potent drivers of consumer demand, availability of supply, and ultimately affect retail profits according to Weather Ads. To give an example, a seasonal temperature change of just 1 degree celsius higher or lower than average typically causes a 1 percent fluctuation in sales. With the UK retail sector being valued at roughly 300bn pounds, this would equate to a deviation of 3bn pounds.

A late start to winter is detrimental to many retailers, especially when demand for outerwear plummets. Typically the season for buying coats occurs start in August and September. A late start to the winter season means delayed sales have retailers sitting on piles of unsold stock in the run up to the Christmas period. It then delays the start to the new spring season, all compounding in a loss of margins and sales.

When nature wreaks havoc on the retail trade

The effect of climate change is not just about whether today is wet or dry, hot or cold, it is about unseasonable and unpredictable spells that could wreak havoc on the retail trade.

Article sources: Weathers Ads, Nature Climate Change, Retail Wire