British companies are tuning in to weather forecasts, not to find out if employees need to grab an umbrella as they head to work, but to help predict consumer trends - a move that is saving them millions of pounds a year.
"Using detailed weather information, individual stores can save up to £3,000 (sterling) a week, which means that a supermarket chain can save between £50 and £80 million a year," Ms Viv Ballentine, head of the Weather Initiative, said yesterday. Britain's Meteorological Office established the Weather Initiative in 1990 as part of its business unit to offer companies the benefit of its long-range forecasting expertise and to develop new sources of funding.
British weather is notoriously unreliable. But using new methodology the Weather Initiative can not only provide long-term analysis but can also produce complex forecasts of the weather's effect on consumer demand for individual products.
"We are analysing historical sales statistics from research company Taylor Nelson AGB and identifying the weather factors which influenced those sales," said Ms Ballentine. "Mathematical equations are then devised to pinpoint the precise relationship between weather and sales to enable retailers to predict demand much more accurately."
This method allows the Weather Initiative to pinpoint the fluctuations of sales of a single brand such as Unilever's Persil detergent (people do more washing when the weather is fine) or Nestle's Kit-Kat chocolate bars, which can go soft in hot weather.
"When the weather changes so do the needs of Britain's stomachs, noses and even pets - with implications for manufacturers, distributors, retailers and their marketing campaigns," said Ms Ballentine.
If companies know there will be a very hot spell and that sales of mayonnaise or barbecue marinades will increase, they can plan an advertising campaign around that and negotiate media buying rates well in advance, said the Weather Initiative.
The organisation is currently looking at 40 specific product lines including soft drinks, cat food, pork chops, toilet rolls and cold cures. In the next year it will cover up to 1,000 product lines, from air fresheners and deodorants to pickles and vinegar.
