Bank Holiday Bonanza – Effect of UK Weather on Consumer Spending
The British press reported this week that packed UK beach resorts over the August bank holiday weekend enjoyed their biggest-spending tourism weekend of 2017. Some £2.5 billion is expected to have been spent as about 17 million Britons took a holiday or day trip. VisitEngland reported that around a million headed to Cornwall, with 450,000 expected to have visited Brighton over the weekend.
We Brits have an interesting relationship with our weather! The British Retail Consortium has reported that weather is the second biggest influence on consumer behaviour after the economy. The weather affects the consumer mood, how we purchase and what we spend.
At a basic level, weather affects the channels through which consumers purchase products. On warm and sunny days, there are more physical visits to stores, but cold and wet weather results in a higher volume of on-line purchases. However, much is dependent on seasonality, industry and product. According to a study by Rich Relevance, on wet or cold days there was a 12% increase in website traffic for retailers in the home & furniture, wholesale and clothing sectors compared to that on warm and sunny days.
Studies have shown that sunshine in particular has a huge impact on how and what a consumer will spend. A 2010 study by Kyle B. Murray revealed that exposure to sunlight dramatically increased levels of consumption as well as the amount spent per item. Experiments showed consumers would willingly pay 37% more for green tea and 56% more for gym membership after being exposed to sunlight.
Weather also drives product demand, particularly in the food and drinks, pharmaceutical and fashion industries. If temperatures reach over 18 degrees in the UK, supermarket statistics show that there will be a 22% increase in the sale of fizzy drinks, a 20% increase in juices and a 90% increase in the sale of garden furniture! Holiday bookings have also been proven to be inextricably linked to periods when the weather is at its worst and studies have also shown that weather can influence what type of car a consumer will buy, with sales and the prices of convertible cars increasing in periods of good weather.
Retailers will therefore be crossing their fingers that the good weather continues – luckily, the forecasters are predicting temperatures will be above average through September and October which should deliver steady sales in what has been a troubled sector.