After three snowy, sales-depleting winters in a row, are the icy temperatures here to stay in the UK and can retailers do anything to lessen the impact of the weather? Charlotte Hardie reports

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Jack-knifed delivery lorries, empty shopping centres, shoppers trudging head-down through a blizzard-blighted Oxford Street. Images of Britain at a snowy standstill before Christmas will be painful for most retailers and bring home once again the unkind truth that the weather is one of their very worst enemies.

This has been the third consecutive winter with bitterly cold stretches. The Met Office said last month that this had been the coldest winter since nationwide records began 100 years ago. And it’s taking its toll not only on the retail sector - many retailers have attributed festive sales slumps to the weather (see box below) - but also on the economy as a whole, if Chancellor George Osborne is to be believed. Last week he apportioned the unexpected 0.5% dip in GDP, in part, to the snow.

Is this business-debilitating weather the start of a long-lasting shift in winter conditions? Meteorologists are divided. The Met Office insists it isn’t. A spokesman says: “It’s not a long-term change, it’s just part and parcel of the variation you see in climates around the world. It just happens from time to time. You’ve also got to bear in mind that the last three winters come on the back of a series of winters with little or no snow.”

No time to chill

But British Weather Services senior risk meteorologist Jim Dale thinks differently: “There is without doubt a short-term lean towards polar winters for the UK, which, given everything we know, is more likely than not to extend for a decade or more to come, though not necessarily winter after winter.”

Planalytics European business meteorologist Steve Speck believes there is “no clear indicator that this is a sign of things to come”. This is largely because of the number of variables at play in determining the temperature of one winter to the next. But then he also points out that the sequence of mild winters around the middle of the last decade were unusual. What we’re seeing now is a return - albeit perhaps temporary - to Britain’s more usual winter climate, which does include one or two major snowfalls a year.

Looking ahead to next winter, everyone is reluctant to call it. “It has a habit of coming back to bite you,” says Speck. “But if you look at December statistically and meteorologically, it’s very unlikely it will be as cold as the December just gone.”

No disrespect to the weather experts, but if you’re a retailer trying to plan for the unpredictable, none of the above will be particularly helpful. Even if this December proves milder than the last, who’s to say the country won’t be blanketed in snow in January or February?

Question of investment

Retailers need to consider whether it is worth pouring much-needed resources into preparing for another icy winter that may or may not happen. Pets at Home chief executive Matt Davies thinks it is worth the investment, particularly since most of its stores are in out-of-town locations. “The week before Christmas was an appalling weekend,” he says. “There were a lot of stores with very few customers.”

Aside from the primary problem of customers being physically unable to get to stores or unwilling to go shopping, Davies says Pets at Home has reflected on what can be done to plan for such adverse weather. “We have a national distribution centre in Stoke and, while last year we were quite fortunate in that Stoke wasn’t that badly hit by the weather, this year we are planning on having snow-clearing equipment on site at the distribution centre because if that gets clogged up we will have serious problems.”

Meanwhile, at the stores, Davies says there were problems with the back of the stores being inaccessible for deliveries and it is considering introducing snow-clearing capabilities on its trucks. Such measures require significant investment, which Davies is as yet unable to put a figure on, but as he says: “Fundamentally the cost of the distribution centre closing because of snow is so significant it would be worth it.”

Ocado is similarly convinced of the benefits of investing in preparing for snowfall. For a business that depends on its ability to get around, its Christmas was buoyant, as it notched up a 27% sales rise compared with a year before. A spokesman says: “We were thoroughly prepared because of last year.”

That preparation included major investment in fitting every one of its 700-odd delivery vans with snow tyres - at a cost of £300 to £400 per vehicle - which meant they could access remote postcodes where other delivery vans would struggle. Throughout the snowy period only six of its vans had to be rescued. The year before, that figure was about 200. In addition, Ocado’s drivers received training on how to drive in icy conditions and the retailer increased the number of drivers to “make the delivery operation robust”.

Ocado’s supply chain technology also came into its own. Its sophisticated routing systems mean flexibility over assigned delivery slots. “We can re-tune our routing system and give more or less time so we’re never over-burdened when the weather is bad, and as a result we made 98% of our deliveries over the winter period,” says Ocado’s spokesman.

The investment would appear to have paid off. “In the whole scheme of things we felt that investing in tackling the snow versus losing business meant there actually wasn’t really a decision to make,” he says.

True grit

But there are other ways to tackle the logistical problems caused by snow that don’t require technological investment or the purchase of Scandinavian snow-clearing equipment.

Barry Knight, head of retail at consultancy Grant Thornton, says the extent to which stores suffered in the snow depended not only on their location but also on local authorities’ ability to clear the snow. Knight adds: “I didn’t see enough mall owners making a song and dance to the local authorities about clearing the snow.” Often it was down to some of the larger and more powerful retailers in malls and retail parks to set about organising the clearing of the pathways themselves.

Davies agrees more must be done to tackle the problem should retailers be hampered by yet more Arctic conditions next year. “Landlords are not taking any responsibility on our retail parks at clearing the snow,” he says. “We’re going to start lobbying our landlords to discharge responsibilities around gritting.”

Tim Robinson, partner at consultancy Kurt Salmon, says there are also low-cost solutions to ensure the supply chain is better equipped to cope. “I would look at identifying which stores are particularly at risk - those that are more remote or out of town - and by monitoring the weather closely and identifying stores at risk, if the weather advances you can look to push product to stores ahead of time.”

Banking on it

But in terms of the more significant investment, not everyone is convinced it is worth it. Having worked in Japan for several years, Robinson is used to helping businesses plan for heavy and prolonged snowfall and building rigorous contingency plans into their networks. “The problem is in the UK it’s such an occasional event it’s very hard to justify that investment. Most retailers in general do a tremendous job of dealing with contingency already,” he says. Deloitte strategic retail adviser Richard Hyman agrees: “During the course of December most parts of the UK were so badly hit that normal life was suspended. I don’t remember that happening on this scale before.”

Furthermore, the main problem for retailers this Christmas was not stock availability but the fact that no one was in their stores to buy anything. Hyman estimates that £750m of retail sales was lost primarily because of this reason: “It’s a pretty much impossible situation to deal with.” A Government pledge to grit every single road would in theory solve the problem - but that is unlikely given the country’s continuing economic problems. Moreover, if it did spend millions improving gritting services for what is in effect an event that might span two or three weeks of the year if at all, it would probably be criticised.

Hyman says: “Traditionally, retailers have got it in the neck for blaming the shortfalls on weather but in this instance it really was a significant factor. What was different this time was the scale of it and the fact it stopped large numbers of people moving anywhere at all.”

And yet, as tough as the snow made this Christmas, retailers cannot forget that many businesses fared well - John Lewis, Sainsbury’s and Ocado, to name a few. And it’s worth bearing in mind one of the philosophies of Walmart, which vows never to mention the weather when talking about its sales. As frustrating as it is contending with Mother Nature, retailers need to still look at the lessons learnt from the past three years to assess whether there is anything they can change within their businesses. If severe weather yet again hampers sales next winter, retailers might well find themselves running out of excuses and sympathy.

Weather Warnings: Retailers that Lost Out

  • Next said it lost £22m in full-price sales in the run-up to Christmas. It said sales were “significantly affected” by the bad weather
  • Comet said its like-for-likes slumped 7.3% over Christmas, partly because of the bad weather
  • Clinton Cards has warned its pre-tax profits will be “significantly lower” than market expectations after the snow hit its December sales. For the five weeks to January 2, Clinton reported like-for-like sales fell 2% and at Birthdays UK like-for-likes were down 1.5%
  • Dixons reported a 4% fall in like-for-likes at its core UK business over Christmas. Chief executive John Browett said: “The adverse weather conditions reduced footfall in the run-up to Christmas Day”
  • Argos owner Home Retail Group took a sales hit of between £20m and £30m over Christmas because of the snow. However, its check-and-reserve service proved especially popular as shoppers worried the snow would hold up orders from etailers or lead to shortages on retailers’ shelves
  • Matalan’s like-for-like sales slid 4.5% over Christmas after many of its 209 - mainly out-of-town - stores were cut off by snow
  • M&S estimated the weather cost it about 1% of lost food sales and about 3% in general merchandise, but still managed a 2.8% like-for-like growth
  • Debenhams said group like-for-like sales in the 19 weeks to January 8 were negatively impacted by between 2.5% and 3% because of the snow in the run-up to Christmas