THE HEAT IS ON

In the volatile fashion industry, manufacturing more product domestically would help combat any unseasonable changes when clothing is needed in a hurry

Mother Nature has a lot to answer for. This year’s scorching summer provided a boost to ice cream companies, but left the fashion industry feeling hot and bothered.

Tour operators also suffered in the heat as many had to heavily discount overseas holidays, while the domestic market welcomed a continued rise in local trips.

And food retailers and manufacturers were either in agony or ecstasy depending on whether their products melted, froze or quenched.

No one can accurately predict what the weather is going to be like next year, but British industries are now looking at how they can beat the heat should 1996 prove to be just as hot.

A number of clothing companies, including Sears, Burton Group, Laura Ashley, Oasis and Marks and Spencer, all cited the unusually warm weather this year as the reason why sales were well below those of the 1994 summer.

Following the release of M&S’s interim results last week, deputy chairman Keith Oates believes there is “nothing fundamentally wrong” with the chain’s product but that nobody wanted winter clothing while it was warm.

Clothing sales at the chain fell in August, September and October, forcing M&S to place more discounts on its clothing to keep stock levels under control.

“Looking back on the problem with last summer, it was simply that people weren’t shopping,” says NatWest textiles analyst Joan D’Olier.

The bout of warm weather that arrived in July took retailers by surprise. “Those suppliers who could get their hands on little summer dresses fast did well,” she says.

Retailers whose clothing had to be brought in from overseas were caught short. A warm October has also caused problems with possible mark downs on coats and warm jackets that are still hanging in many high street stores.

The summer may be over, but a mild winter would continue to wreak havoc on the fashion industry, says D’Olier. “There isn’t really any solution, but retailers can source more of their products in the UK,” she suggests.

In the volatile fashion industry, manufacturing more product domestically would help combat any unseasonable changes when clothing is needed in a hurry.

The British Apparel & Textile Confederation, the British Retail Consortium and the Department of Trade and Industry have set up the Apparel and Textile Challenge this year to strengthen the relationship between UK manufacturers and retailers in the hope of curbing costs and reducing risk.

Also, getting accurate up to date weather forecasts, specifically designed for manufacturers and retailers, is considered valuable in forward planning.

A subsidiary of the Meteorological office, The Weather Initiative, provides forecasts for major UK retailers and manufacturers for anything up to 30 days in advance.

Its managing director, Vivienne Ballentine, says many manufacturers who did not subscribe to weather forecasts were hit most severely by the hot summer.

“Many of them were not sufficiently prepared, especially in the soft drinks area where they did not have enough stock, right down to the plastic bottles.

“Let’s face it, we’re not 100 per cent accurate, but at least retailers and manufacturers are going to be able to make a decision based on something rather than just sucking their finger and pointing it in the air,” says Ballentine.

The Weather Initiative provides information for its clients on how the weather is going to affect their business and what can be done to combat the prospect of unseasonable climates.

And the service is developing an additional tool that will help manufacturers and retailers from next year by forecasting what demand for particular products could be, based on the weather and past seasons.

An example is beer, lager and soft drinks. When the temperature rises above 180C, there is a ten per cent volume boost in beer sales for every 30C increase. And for every 10C rise, there is a three per cent rise in soft drink sales.

Ballentine says the new service, which can also pinpoint demand geographically, covers anything from shower gel to food.

Last summer’s heat meant consumers were clamouring for ice cream. Häagen-Dazs broke all records trying to meet demand, while Mars reported an all-time sales high, with its factory churning out half-a-million bars a day of its top brands, Mars ice-cream and Opal Fruits ice lollies.

Cadbury spokesman Richard Frost estimates that chocolate sales dipped by less than one per cent, despite the belief that hot weather is disastrous for chocolate manufacturers and retailers.

“There certainly was heat damage this year, but most retailers have air conditioning or keep chocolates in drinks chillers,” he says.

Frost says that using coolers as a marketing initiative for selling chocolate in the summer will not be necessary as the company plans to better educate manufacturers and retailers to reduce the risk when the weather heats up.

Using liquid crystal thermometers in stores to monitor temperatures and advising retailers on where to stock chocolate supplies will be tasks undertaken by Cadbury before the 1996 summer, he says.

The British tourism industry had its winners and losers this summer as well.

Keith Betton, spokesman for the Association of British Travel Agents, says that approximately two million “floating voters” – the British travellers who tend to look for cheap, last-minute overseas holidays – opted to stay at home this year because of the unexpectedly good weather.

Over-supplying overseas holidays proved to be disastrous for UK tour operators who ended up heavily discounting instead.

“The average profit from a holiday is about two per cent. This summer tour operators will probably find their profit margins are less than that,” says Betton.

However, it’s bad news for those hoping to pick up the same cheap overseas holidays next summer as was the case in 1995. The industry has decided to reduce its supply of holidays for next summer to curb discounting. “And if the weather turns out to be bad, we’ll all be rubbing our hands with glee,” he says.

Tourism in Britain had a prosperous summer with increases in day visits and hotel occupancy rates.

The West Country Tourist Board, the first to release its summer results, had an increase of 6.1 per cent in volume from June to September while accommodation rose by eight per cent.

The British Tourist Authority is yet to release any of its statistics but says a hot summer and warm autumn has rejuvenated the local tourist industry.

However, it is not all good news. Charles Newbold, managing director of Thomson holiday group, which is the market leader with 34 per cent of the overseas travel tour business, delivered a scathing attack in August on the state of British seaside holiday resorts.

Newbold says seaside resorts had failed to invest over the years and even with the recent summer could not compete with Mediterranean resorts. He described a visit to Southend as “hell on earth”.

The English Tourist Board denies there is a terminal decline in the industry as results this year show a 24 per cent increase to 90 million trips by UK residents in Britain in 1994, bringing in a record 3.19bn.

But if the overseas tour operators are hoping that summer 1996 will be a little cooler, the British tourism industry will be crossing its fingers that unseasonably warm summers continue.

If the 1995 summer has proved anything, it’s that more planning and flexibility is needed, just in case the mercury soars again.