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Heatwave drives 'spontaneous' shopping in DIY sector

'Spontaneous' shoppers boost food and DIY sectors while other parts of the high street remain in the shade.

Britain still loves a barbecue and spending time in the park, but has little desire to lay carpets in the summer. Those are the early conclusions that can be drawn in the retail world from the heatwave in July.

The retail industry has not had much luck with the weather in the past year, with cold winters and wet summers keeping shoppers away.

With the economic outlook uncertain, this has provided consumers with yet another reason not to part with their cash. It has also helped to exacerbate the rise of online retailing.

However, the spell of hot weather in July – the most prolonged heatwave since 2006 – has finally provided retailers with a reason to cheer Mother Nature.

In general, retailers prefer the weather to be predictable and to avoid extremes – whether hot, cold, or wet. The July weather was extreme – with temperatures clearing 30C – but such has been the wait for a spell of hot weather, Britons appear to have taken the opportunity to splash out.

Lord Wolfson, the boss of Next, said customers have become more "spontaneous", with special events such as the weather impacting sales much more than in the past, because of the economic environment and the development of online and convenience retailing, which means shoppers do not have to buy as much in advance.

Supermarkets and DIY retailers appear to have particularly benefited from this consumer reaction.

B&Q and Homebase, Britain's two biggest DIY retailers, have suffered badly from the recent cool and wet summers, because the sale of BBQs, outdoor furniture and plants is driven by seasonality.

So, when Kingfisher, the owner of B&Q, posted a trading update last month, it unveiled its best performance in the UK for three years, helping to dispel doubts about the future of the DIY sector.

This included a 89pc increases in sales of budget charcoal barbecues and a 56pc increase in sales of wooden outdoor furniture. Supermarkets, meanwhile, have seen an uptick in barbecue food, drink and ice cream.

Sainsbury's boss Justin King said sales at the company's convenience stores next to parks have been "extraordinary". He added: "People have just said, 'Right, we have got a couple of sunny weeks, we are just going to have a blast. We are going to go in the parks, we are going to have barbecues.'"

Mr King's comments were borne out by the latest industry data from Nielsen, which showed that supermarket sales rose 6.4pc in the four weeks to July 20, the biggest increase outside of a special event for two years.

However, the sunshine has not been good news for all retailers – there is little interest in electricals, home products, and, to an extent, clothing in such heat.

Carpetright has already warned that like-for-like sales were down by a double-digit percentage in the warm weeks, while John Lewis's weekly figures have also slowed.

So, while the heatwave may have helped certain retailers, it is not going to be the saviour of the high street. Indeed, the first sector-wide data for July, shows that sales were flat in the month.

Don Williams, national head of retail at BDO, said: "On the positive side, discounting is nowhere near as deep or widespread as last year, and fashion stores are being really canny about buying stock specifically for discounting to get people through the door and in front of full price lines.

But aside from market leaders such as Next and Zara, there is still simply not enough flexibility and speed in most retailers' supply chains.

"The results show how weather extremes can send things out of kilter for retailers who don't have the ability to react quickly and haven't invested in their products and customer experience."

Source : Graham Ruddick – The Telegraph

05 August 2013
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