Sun, sea and sales … Britain’s delayed summer arrives to thaw the retail chill
By Sarah Butler
After a difficult period on the high street, base rates are falling, temperatures are rising and things are looking up.
It’s still early days, but the 2024 back-to-school retail season is already barely getting a passing grade, according to prognosticating industry experts.
It’s been a second cruel summer in a row for retailers and the hospitality business, but a more prolonged spell of warmth – and the first cut in interest rates in more than four years – may finally heat up the market, if it’s not too late.
From Argos paddling pools and outdoor furniture at garden centres to Heineken beer and Unilever’s ice-cream brands, sales have been dampened by poor weather, which has added to the pressure from high interest rates and energy bills. Sales volumes were down in June and July in the UK, according to the latest CBI distributive trades survey, with retailers expecting more falls in August.
The late arrival of more sunshine and less rain for large parts of the country this month and into next could, finally, boost sales of groceries, summer clothing and seasonal items for the garden, which all benefit from good weather. Pubs also do well when their outdoor spaces are packed with fair-weather drinkers.
Food retailers have generally had a better time than fashion chains this summer as they have benefited from households cooking at home rather than dining out, in an effort to offset higher bills. However, Richard Walker, the chief executive of budget grocery chain Iceland, says it hasn’t had “that traditional seasonality layered over the top”, while shopping patterns have been affected by the Euro 2024 men’s football tournament and other events. Walker said the “proper run of good weather”, which began near the end of July – combined with payday boosting workers’ wallets – had already sent ice-cream sales soaring by 50%, frozen burgers and sausages up 40% and soft drinks 15%.
Scott Bernhardt, the president of retail weather consultants Planalytics, said that the expected run of good weather for many parts of the UK in August was likely to help retailers and some hospitality businesses. He is predicting a 23% uplift in sales of barbecues in the next few weeks, compared with a typical August, and a 4% rise in ice-cream sales.
But there are a few catches. “It’s coming very late in the season,” Bernhardt said, pointing out that many clothing and seasonal goods retailers had already begun discounting their summer wares at the end of last month and so will have to take lower profit margins from any late sales rush.
…