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New Zealand’s endless summer hurts retail sales

  • News
  • May 4, 2016
  • Elly Strang
New Zealand’s endless summer hurts retail sales

The idea of a never-ending summer is a blessing to most, but to retailers, it’s more of a curse.

Weather that diverges from the usual patterns can make it harder to sell seasonal stock and according to the National Institute of Water and Atmospheric Research, New Zealand just experienced the sixth-warmest April on record.

Clothing company Hallenstein Glasson reported a 21 percent profit drop in its first-half results in March this year, with CEO Graeme Popplewell saying an unusually warm Autumn had impacted on sales.

He said the unexpected temperatures on top of an already tough operating environment had contributed to its decreased sales.

“The record temperatures in both New Zealand and Australia have not been conductive to early autumn sales and the retail environment in fashion apparel remains challenging,” he said.

A similar problem was reported last year by Kathmandu last year when it posted a $1.8 million first-half loss.

First Retail managing director Chris Wilkinson says this problem is cropping up again across the country.

“Over the last month we’ve travelled through all the main centres and working with a lot of big mall owners and a lot of the retailers and there is a lot of stock sitting out there across the country,” he says.

A lot of what’s not selling is big-ticket items like coats and long boots, he says, so retailers are hanging out for a “deep dive” into winter.

As a result, he says there may be a few more sales happening to encourage consumers to open their wallets.

However, retailers who have more trans-seasonal products on offer may be benefiting from the warm weather.

“The flipside for likes of Kathmandu is people could be continuing these outdoor activities for a bit longer like camping, so they could be more resilient than other categories,” Wilkinson says.

One way around this weather problem that keeps popping up is encouraging Kiwi shoppers to get more into layering.

Clothing that can be layered on top of one another, like cardigans, tops and coats, can often switch between seasons and be dressed up or down.

Wilkinson says this could help lessen the impact of when seasonal-specific stock doesn’t sell.

“New Zealand isn’t very good at layering, but in Europe they are and that gets around this need to constantly have a summer and winter wardrobe,” he says.

Another solution is GIS weather mapping and future forecasting.

Technology like Esri is being used worldwide by retailers to track population growth when choosing a new store location or predict long-term weather patterns for stock.

IBM Watson has also delved into retail data by predicting what products will sell out in stores.  

Wilkinson says while once upon time this kind of data was an imprecise science, it’s getting increasingly more accurate.

“We’re going to start to see people in New Zealand using mapping strategies for long-term analysis to work out what their ranges need to be and you might start to see Dunedin stores having different range allocations to that of Auckland,” he says.

Meanwhile, MetService meteorologist Lisa Murray says the warm weather will continue into May, with unusually high Autumn temperatures felt across the country.

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