Too hot for a latte: Industry figures detail heatwave effects on retail segments

Coffee sales fall for first time in five years while garden centre sales are in full bloom

Lorraine Higgins, REI’s chief executive, suggested the fall in coffee sales is “wholly attributable to the heatwave”.

Lorraine Higgins, REI’s chief executive, suggested the fall in coffee sales is “wholly attributable to the heatwave”.

 

The start of the summer heatwave blew the froth off sales of hot coffee, sending the segment into its first monthly decline for five years, according to the latest industry research.

Quarterly figures provided by Retail Excellence Ireland (REI), an industry lobby group, show that hot beverage sales slipped 3 per cent in June. This was the first decrease since the summer of 2013, following which the sector entered a mini-boom that has flooded urban centres with new cafes.

Lorraine Higgins, REI’s chief executive, suggested the fall in coffee sales is “wholly attributable to the heatwave”. Hot beverage sales rose 5 per cent in April, which caught the chillier end of Storm Emma, and also rose close to 3 per cent in May, giving a total increase for the second quarter of 2.3 per cent.

The figures are contained in REI’s Q2 productivity report, which tracks quarterly sales across 19 different retail market segments. The report, produced in conjunction with research firm GfK and Grant Thornton, collates its data directly from the electronic tills of REI members, giving the most up-to-date snapshot of performance across the industry.

The report finds that, across the industry, overall Q2 sales rose close to 1 per cent, recovering in May and June after the inclement conditions that persisted into April had kept many shoppers at home.

‘Concerning’

The grocery sector performed strongly throughout the quarter, with overall sales up by more than 2 per cent. Sales of menswear, ladieswear and childrenswear all disappointed, however, down between 1.7 per cent and 7.5 per cent.

Ms Higgins said the declines were “concerning” and attributed much of the fall to online shopping.

The biggest beneficiary of the heatwave that began in June has been, unsurprisingly, sales at garden centres. After falling back by 8.6 per cent in April, they rebounded by 24 per cent in May and more than 40 per cent in June, averaging 18 per cent ahead over the full quarter. Agri-retail sales also rose by more than 20 per cent in June.

The continuing housing boom was reflected in sales up more than 4 per cent in the furniture and flooring sector.

Television sales

So-called “brown goods” electronics sales, which includes televisions, rose by 6 per cent across the quarter, including an 11 per cent spike in June. Television sales traditionally rise ahead of major sporting events such as the World Cup, which took place in Russia this summer.

“Overall it proved to be a very mixed trading period with the weather playing a central role in sales trends,” said Ms Higgins.

“Concerning for the industry is the continued negative sales trends recorded by discretionary spend categories like footwear, ladies fashion, menswear and jewellery. Overall, there remains a degree of volatility... The industry remains susceptible to outside influences such as Brexit, changes in weather patterns and aggressive marketing by retailers operating outside of Ireland.”