For firms whose sales depend on the weather, climatic change adds to the agony. By Annabella Gabb.
"And now the weather: there's no sign of an end to the current heat wave. It will be another hot, sunny weekend, with temperatures reaching the high 80s." For most people in this country such a forecast brings the welcome prospect of a relaxing weekend spent out of doors with family and friends. But for employees and management alike at Yorkshire-based barbecue manufacturer Kirklees Developments it means just the opposite. It is the signal for action. Says marketing director Rosalie Norbury: "If the sun shines, it shines on everybody everywhere and all our customers want to restock at the same time. We have to call all hands to the pump, from the managing director downwards. If we can't supply immediately, we miss the chance."
As a small company operating in a weather-related industry, Kirklees feels the pressure of its situation more acutely than most. But its experience reflects the problems faced by any business, whatever its size, which depends heavily on a particular element for its existence. Whether the product is ski equipment, barbecues, electric cooling fans or suntan lotions, the fact is that sales to the consumer are highly precarious, subject as they are to the vagaries of the weather, which in Britain is probably more unpredictable than anywhere. In some cases high temperatures alone are not enough: for Boots' sun protection range, Soltan, it must be hot and sunny before the weather will stimulate sales. In the wintersports industry the snow must fall at the right time and regularly to coincide with the package tours. Whatever the sector, if sales occur they are confined for the most part to just a few short months. Any hiccup in meeting delivery dates risks losing not only the sale but also the customer's confidence.
After three unusually mild winters and two uncharacteristically hot summers, companies in weather-related industries have seen their traditional perceptions of the weather shaken. Media coverage of climatic and environmental change has begun to persuade the sun-starved consumer that perhaps the greenhouse effect has its attractions. That may be good news for companies dependent on good summers. Used to exercising caution to cope with the capriciousness of the British weather, they have seen sales soar in the past two seasons, particularly in 1989. At Pifco, for example, chairman Michael Webber claims that he could have sold "considerably more" electric cooling fans last summer, so great was the demand. One major retailer reported a 12 to 13 times increase in sales of fans in one week, compared with an average summer week.
If mild winters were here to stay, it could sound the death knell for skiing in Scotland; even in the Alps the shortage of snow of the past three years has produced dire results for the manufacturers of ski equipment. Last November industry leader Skis Rossignol reported sales for the second quarter down 25%, while the small German manufacturer, Volkl, was forced to introduce short-time working in December, such was the slump in demand. Even if this season is excellent, it will take two good years for the industry to regain its balance.
Professor Keith Smith, an applied climatologist at Stirling University, believes that while the ski industry can still look forward to good seasons, the frequency of very good snow will decline dramatically in the next century. "The chances of a winter equally warm or warmer than 1989-90 are going to increase by a factor of 10 by the year 2030," he says. "The frequency of cool summers and cold winters will decline. What we've been seeing will become much more the norm."
Where sales to the consumer are concerned, there are obvious winners and losers in both scenarios, though some are more sensitive than others. In warm, dry weather, sales of soft drinks, beer, lager, ice cream and leisure wear do well, while eggs, soups, tights and lawnmowers do not. In late November, for example, Derby-based lawnmower maker Qualcast cut 97 jobs as a result of the drought. In cold, wet weather, rainwear, umbrellas, paint and hot drinks prosper, while salads, garden furniture and soft drinks languish.
Smith, who recently launched a consultancy called Weatherwise in conjunction with The Meteorological Office to advise companies on how best to counter weather sensitivity, believes that considerable savings can be made by attention to stocks, the timing of delivery, staffing levels and advertising. But with detailed and accurate long-term forecasts simply not available, the logistics of production and distribution in these circumstances are highly complex.
Meticulous planning starts a year or more before the summer in question. The key to a smooth season is maintaining as close a relationship with core buyers as possible, all year round. Barbecue maker Kirklees is in some ways fortunate in that it has a small customer base: 60% of its sales go to major retailers like Marks and Spencer, Tesco and Sainsbury's Homebase, which sell under their own labels; the remaining 40% are sold under Kirklees' own brand name, Fir Tree, through outlets ranging from Harrods and catalogue specialist Argos to garden centres, garage forecourts and small local shops.