Business Irish

Wednesday 21 March 2018

Sunshine lifts more than mood as big firms bask in sales spike

THE GOOD weather has an uplifting effect on more than our moods, with a wide variety of big company names reporting a spike in sales as a direct result of the sunshine.

Summer conjures up images of barbecues, beach chairs, chilled drinks and fresh food, and the people who make those products have seen a real correlation between the temperature and their profits.

DIY stores have been the biggest winners. The summer period has long been their most important season – sales of hardware, paint and glass jumped by 14pc in May – but exceptionally good weather exaggerates this even further. Grafton Group, which owns Woodies and Atlantic Homecare, has been a clear beneficiary.

"We saw this manifest in Grafton's most recent trading update, where growth picked up from negative to flat," said Merrion Capital's head of research David Holohan.

"The good weather means this will have picked up even more in the next trading update, probably progressing into single-digit positive growth."

It's been an equally lucrative summer for ice-cream makers. HB, owned by UK retail giant Unilever, has seen Irish demand skyrocket in the past month – Ireland now consumes the second highest amount of ice cream per capita in Europe. "Our sales team are working around the clock to fill fridges," said the company.

Unusually long periods of sunshine also have a clear effect on consumer sentiment, which shot up in June and is now at its highest level since 2007.

"On the odd occasion that we experience a prolonged spell of exceptionally good weather, it does seem to lift the mood of the Irish consumer," said the most recent KBC Bank Ireland/ESRI Consumer Sentiment Survey. Sentiment is noticeably affected when sunshine is more than 40pc above or below the norm for a particular month.

Supermarkets are feeling the benefit, too. Upmarket British grocery chain Waitrose said the long-awaited arrival of summer weather has resulted in its strongest weekly sales performance outside of Christmas and Easter.

Sales at the company jumped 14.5pc to £125.8m (€146m) in the first week of July. "Out came the sun and so did the barbecues," it said, highlighting a 450pc rise in demand for charcoal and a 173pc increase in sales of barbecuing meats.

Barbecues are generally accompanied by popping of corks, with beverage manufacturers reaping rewards. C&C, the makers of popular summer drinks Bulmers and Magners, saw its share price jump more than 10pc in early July.

"We've seen a definite increase in Bulmers sales – they're up at least one-tenth in the last few weeks," said brand spokesperson Rachel Sherry. "So much so that we have had to increase production at our manufacturing plant in Clonmel. Sales are back at pre-recession levels, not since since 2006/2007."

Sunny skies also result in a weekend exodus from cities. Aer Arann said this weekend would be its busiest ever as demand for travel surges. The carrier's Aer Lingus regional service is preparing to fly over 16,000 passengers on 328 flights, its most since the franchise began.

Sarah McCabe

Irish Independent

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