How La Nina and climate change are hitting Aussie retailers
Reusable water bottle company Rolla Bottle calls the summer months ‘water bottle season.’ Director Katy Reed explains that the silicone product – which is sold online, and stocked across Australia – is a year-long product, with sales typically increasing in summer as people go on holidays, and enjoy the outdoors. But, as Australia faces its third consecutive La Nina weather event, the weather has been colder and wetter than normal across large parts of the country. Although c
lthough customers are set to spend more than last year despite cost-of-living pressures, adverse weather conditions are dampening sales expectations for retailers who are eager for sun.
Reed told Inside Retail that Rolla Bottle is on track for a strong sales period in the lead-up to Christmas, as gift-giving is not weather dependent, and travel is back on the cards.
However, she said that if the weather isn’t warm over the January and February summer months, it might negatively affect demand.
“When the weather is cool, people tend to stay indoors more, and the need for a portable water bottle in the active lifestyle and outdoor sectors decrease,” she said.
“The recent flooding in parts of Australia and the associated economic costs involved will [also] impact available consumer spending which is an indirect effect of climate change.”
Another business that has been affected by the wet and cool weather is Australian swimwear company, Budgy Smuggler.
Owner Adam Linforth believes that La Nina definitely hurts swimwear sales.
He said the brand has expanded into new categories – like party shirts and underwear – which are less seasonal.
“We expected a 30-40 per cent rise in sales on the East Coast, but we got the opposite,” he said.
“In contrast, in Europe we expected a 50 per cent rise and we got 80 per cent growth where it was really hot and dry.
“To get around [La Nina] we’ve focused on growth in overseas markets. The UK and Europe now represent 25 per cent of our sales.”
Great cost to business
As reported by Inside Retail, catastrophic weather events, such as bushfires and floods, often lead to supply disruptions and interruptions to trading hours and delays, which have exacerbated existing pressures on retailers.
Australian Retailers Association CEO Paul Zahra told Inside Retail that weather conditions have a significant impact on the retail industry. He said it can hit the fashion industry the hardest, as the product in-store does not match the weather outside.
This is particularly true when large parts of Australia are experiencing cold weather and heavy rain. Customers are seeking raincoats and umbrellas, and stores are brimming with shorts, t-shirts and summer dresses.
Zahra advised retailers that it’s best to reduce prices early to entice shoppers given the limited life of a fashion garment.
“The best way to respond to unseasonal weather is to ensure that you don’t get caught with too much unwanted inventory, which could ultimately destroy a business,” he said.
“We [also] know from past experience that Aussies are willing to continue to support local retailers and suppliers with online purchases [so] offsetting risk by continuing to strengthen online purchasing [is] important
Meanwhile, Linforth is quietly optimistic about the summer ahead, but said that the last year has been extreme.
“You couldn’t swim on the East Coast of Australia for a lot of this year with the flooding and pollution, [and] we’re seeing early signs of pent-up demand,” he said.
“When there’s a small run of decent weather, we’re seeing sales hit record numbers for this time of year, but we’ve got a lot of room to make up for what has been a pretty tough 12 months for Australian swimmers.”
Climate change can’t be ignored
Zahra stressed that, due to climate change, the retail industry needs to anticipate and prepare for ongoing weather events.
For instance, he said that in the event of flooding or bushfires, there needs to be more attention to early warning systems, as well as established crisis management procedures, and a standard set of protocols around things like leasing provisions in the event of a natural disaster.
He added that large retail operators have a crucial role to play in supporting local communities during crisis events.
“Retailers themselves need to consider checking their location for exposure to flooding, reviewing insurance provisions and having a crisis plan in place for staff and customers,” he said.
Linforth emphasised the fact that customers are becoming more enthusiastic about purchasing brands that look after the environment.
The brand manufactures everything in Australia, which means it avoids wastage.
“People are happy to pay a bit more for brands that walk the walk, not just talk the talk, when it comes to looking after the environment,” he said.
Part of Rolla Bottle’s strategic direction is to remind consumers about the benefits and reduced environmental impact of using a reusable bottle.
It donates 10 per cent of its profits to help clean up the oceans, and supports organisations that help to remove plastic pollution caused by single-use items from oceans and waterways.
Reed said that climate change has brought awareness to conscious consumption, and the impact of a single-use lifestyle.
“Now more than ever the effects of climate change are being seen and cannot be ignored,” she said.