I was speaking with a pub landlord last week; about the impact the recent good weather was having on his business. This particular landlord has been recording the weather against revenue for many years and he can now predict, with the help of the Met Office, the impact on sales, particularly through the summer months.

This particular pub would benefit from its location by the river and plenty of outside seating but it did get me thinking about the impact the good old British weather has on other businesses. Needless to say, I decided to buy a drink and sit in the river garden to contemplate this further.

There are obvious examples of businesses, where weather can have a significant impact on the bottom line, for example; how many ice creams would be sold during the darkest, coldest days of winter? Not many where I’m concerned! However, there are businesses of all kinds that can be affected, even if indirectly, by both good and bad weather. The key for any business owner, is to know how they are impacted and what can be done to minimise the effect.

Customers
What are your consumer’s behaviors during certain weather conditions and/or times of the year? It’s a valuable question for all businesses to ask, and as the friendly landlord highlighted, it’s not just the tourism industry. Retailers, restaurants and all types of businesses should consider the impacts of weather patterns on their customer’s purchasing habits in order to optimise sales. Many large brands do extensive research and weather predictions in order to optimize their product offerings to meet the fluctuating demand of their consumers, however small business should also be aware of the impact.

It’s also important to understand and identify how much impact weather has on your businesses performance so you can accurately predict future performance. Just because an ice cream shop has a great spring this year, doesn’t mean it will do as well next year. Knowing the difference between real growth and weather conditional performance can empower the owner of the ice cream shop to prepare for adverse weather fluctuations in the future.

Products
Demand aside, a number of products are subject to price fluctuations based on weather conditions. Agriculture is an obvious one as weather has a direct effect on yield, but it certainly doesn’t end there. The unpredictable British weather can have a devastating impact on retail sales, a comprehensive review by weather experts has claimed. A seasonal temperature of 1°C higher or lower than average typically leads to a 1pc change in sales, according to data from US-based The Weather Channel, a subsidiary of media conglomerates The Weather Company. In the £300bn UK retail sector, this would equate to a loss, or gain, of around £3bn.

The study points to the example of last year’s autumn, which was 1.5°C warmer than usual. Clothing and footwear sales, which account for 13pc of all retail trade in the UK, were hit hardest, and the weather firm estimates that business owners lost £700m in September and October alone due to muted demand for winter clothing. Low sales of winter coats, knitwear and boots meant that shops were forced to delay displays until later in the year. With retailers holding excess stock, many were forced to introduce heavy pre-Christmas discounting.

The Office for National Statistics has previously said that only sustained extreme weather conditions have a substantial impact on the UK economy as a whole. This includes the widespread heavy snow and extremely low temperatures in the winter of 2010, which caused retailers to suffer their worst December on record. With customers struggling to travel or choosing not to travel, retail sales fell 0.8pc during the month, which is usually retailers’ busiest time in the run-up to Christmas.

Staff
While the hot weather can be beneficial for many businesses’ profits, employers also have a duty to ensure that work temperatures are reasonable for staff, customers and clients. The Federation of Small Businesses (FSB) has published guidance to help businesses overcome the challenges as temperatures reach record levels. There is no legal requirement for a maximum working temperature, but employers should adhere to health and safety laws that necessitate a comfortable working environment and the provision of clean and fresh air.

This could be an ideal time for employers to explore the potential benefits of flexible working for their staff to minimise the hot weather’s impact. Severe weather, such as temperatures significantly above the average, brings into focus the impact weather can have on businesses and their ability to trade. Whilst the FSB research suggests two thirds of their members have been negatively affected by severe weather in the last three years – only 25 per cent of businesses have a resilience plan in place that specifically includes severe weather.

I won’t let the sun go down
The changing UK weather will clearly affect some business more than others, however it would be prudent for all businesses to consider the possible impact and create contingency plans. I know one landlord who is observing and tracking the Met Office forecasts with a keen eye and I hope the sun continues to shine for him. I look forward to sitting in his river garden again, enjoying the British sunshine and cold drink, as I again contemplate the subject of my next blog.