Heatwave gives business hot issues

By Ben Richardson
Business reporter, BBC News

There's more to summertime business than ice-cream vans

As the UK and consumers swelter in the latest heatwave, businesses are doing their best to operate as normal.

Results are mixed, however, and while some profits have hit a red-hot streak, others are feeling an earnings chill.

Retailers are among those experiencing the worst of the effects as people stay away from town centres and enjoy the sunny skies, research group Footfall said.

According to the company's latest figures, the number of people in town centres on Wednesday - which proved to be the hottest July day since records began - was down 7.3% compared with a year earlier.

"Necessity shopping is still taking place but other leisure activities and trips tend to fill the gap previously occupied by a shopping trip," Footfall said.

"As the period of extreme weather continues, it is keeping consumers away from the shops," the research group added.

Consumers also tend to search out larger retailers that offer many different products under one air-conditioned roof, hurting sales at smaller shops and outlets, analysts said.

'Dramatic effect'

And it is the same with the products that the companies sell, with those that allow people to enjoy or avoid the heat doing exceptionally well.

One wholesaler told the BBC that his independent traders were selling large amounts of flip-flops, sunglasses, water pistols, and buckets and spades.

He added that the best-selling item was a plain green-plastic watering can that allowed users to beat the hosepipe ban imposed across large parts of the UK and keep their gardens, and often themselves, refreshed.

HOT SELLING GOODS Champagne up 40% Still water up 27% Wine up 25% Sparkling water up 23% Ice lollies/ice cream up 20% Source: Tesco's yearly and weekly figures

Supermarket group Tesco said that it had seen a surge in demand for a number of sun-related products, including 82,000 electric fans in a week - three times the amount it sold a year earlier.

"The heatwave is having a dramatic effect on sales," said Tesco spokesman Jonathan Church.

"As the temperatures rise, most people are using the garden as their dining room and those products you associate with outdoor eating have seen huge increases in demand."

The company said that over the coming weekend it expected to sell 1.2 million burgers, 2 tonnes of tiger prawns, 400,000 bottles of sun cream, 55,000 bottles of aftersun cream and 50,000 bottles of insect repellent.

It also was ordering extra supplies of bread, rolls, salad and charcoal.

Fruit and wine

Away from the High Street, and the winners and losers of the heatwave are even less clear.

Power companies are seeing a massive increase in demand as people plug in their new fans and air conditioning units, but at the same time the surge in usage has meant the prices that the firms pay for their wholesale energy also have jumped.

Manufacturers and other large firms are often having to deal with a workforce that is lethargic after sleepless nights trying to rest in the heat.

According the National Institute of Occupational Safety and Health in the US, productivity in a non-air-conditioned workplace drops by more than a quarter when the temperature hits 32 degrees Celsius (89.6 degrees Fahrenheit).

Using that as a guide, and citing factors such as a change in spending patterns and poorly performing infrastructure, the Centre for Economics and Business Research (CEBR) estimates that the UK will lose up to £211m a day because of the heatwave.

Pigs and livestock are vulnerable to high temperatures just like humans

The countryside will also be affected by the higher temperatures and lack of rain, losing £2.1m a day, the CEBR said.

One of the biggest problems is the outbreak of fire in bone-dry fields, while cattle and livestock are often finding it too hot to eat, hampering their growth and milk production.

Pig farmers have also reportedly been applying suncream to their animals in order to stop their skin burning.

It's not all bad news, however, and many farmers literally are planning to make hay while the sun shines because it cuts the amount of the fuel they need to dry the crops when they are damp.

And fruit producers are expecting the heat to produce a good crop of cherries, plums and apples, while the UK's wine-makers are hoping for a great harvest - as long as the temperature doesn't head much higher.