Stores warned over more hot spells

20 August 2003
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21 August 2003 | Robin Parker and Colleen Harris

Retail buyers have been urged to prepare alternative plans for future spells of hot weather after record-breaking temperatures pushed supply chains to the limit.

Items in scarce supply included fans, sun cream and ice cream. One retailer said it faced "short intermittent supply", particularly of bottled water, supplies of which were "late or non-existent".

Chris Saumby, general manager of forecasting at Asda, said the supermarket had to re-source many salad items to maintain continuity of supply.

"The English harvest has been taken up so we're having to move our supply, probably to Europe, particularly to the Netherlands."

When temperatures reached 100 degrees Fahrenheit earlier this month, juice sales at Safeway's supermarkets were 40 per cent higher than a typical summer week. Burger sales shot up by 800 per cent and iceberg lettuces 700 per cent week-on-week.

Tesco said beer sales were 70 per cent higher year-on-year for the same week.

Brewing giant Carlsberg-Tetley imported extra supplies and lager vats from its Danish head office to cope with what it called "unprecedented" demand.

Its lager sales rose 40 per cent in the past two months and the company's plant filled a record 3,000 cans per minute during peak demand.

But Terry Maufe, chairman of the Malting Barley Growers Association, warned of problems further down the supply chain.

"Malting barley prices were at an all-time low in last year's harvest and there's going to be less grown this coming year," he said. "Maltsters will be able to cope but the supply and demand situation is going to get more imbalanced."

Manufacturers and retailers plan for three times as many soft drink sales in July than in winter months, but one hot day, let alone a week of extreme weather, can more than double this, said Alan Harrison, director of research for Cranfield Centre for Logistics and Supply Chain Management.

He said that the long spell of hot weather had "thrown a major spanner in the works".

"Manufacturers improved in their ability to respond to surges in demand, but there are limits to how far you can push them."

With future hot summers predicted, Harrison said manufacturers will face a greater trade-off between increasing capacity and keeping costs down.

Businesses were also hit by rising electricity prices as widespread use of energy-draining air conditioning and refrigeration units caused severe shortages of supply, according to market analysts at EnergyQuote.

Electricity exports also increased to continental Europe, particularly France, where nuclear generation fell as the temperature of the country's river water, which is used as a coolant for power plants, rose.


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