IT’S become all too familiar in recent years for UK firms, suppliers and even the government to blame poor performance on the weather.
B&Q-owner Kingfisher was the latest retailer to cite last year’s washout summer (along with forex woes and the recession) for a dip in profits yesterday – taking the opportunity to issue a stark warning that forecasts for a freezing Bank Holiday weekend could mean more of the same to come.
It can be easy to dismiss such claims as poor excuses when they crop up more than once, but chief executive Ian Cheshire has been equally quick to thank sunny skies for lifting patio furniture sales in the past. With no sign of a thaw in temperatures over Easter it looks like this time he’s right to be cautious.
Firms that rely on seasonal products and discretionary spend are easily hit by external factors that discourage customers from hitting stores – after all, who wants to host a barbecue when it’s raining cats and dogs and there might be horsemeat in your burger?
It shows in the nine per cent decline in Kingfisher’s shares over the past year, and in recent updates from Debenhams, Domino’s Pizza, John Lewis and even Swedish giant H&M, which one might expect to have got to grips with the odd snowdrift or two by now.
But the economic impact of inclement weather, as the forecasters love to call it, goes way beyond the retail sector.
Back in December 2010 heavy snowfall is estimated to have cost the UK up to £1bn per day, contributing to the 0.5 per cent fall in GDP that Britain suffered that winter.
Yesterday, insurer RSA raised the spectre of the triple-dip recession again, warning that the current cold snap is costing the economy £473m per day – and that’s on conservative estimates that just a third of the population is affected, rising to as much as £629m if a further 10 per cent of the workforce fail to make it into work.
With the added hit of two bank holidays to finish off the quarter and drag down output even further, and consumers unlikely to battle the blizzards to splash out on DIY tools and the already-on-sale summer clothes flooding the shops, there’s unlikely to be blue skies on the horizon for Kingfisher – or the coalition – anytime soon.
Elizabeth Fournier is News Editor of City A.M. @ej_fournier