Forecasting demand: A surge in ice cream sales left some retailers scratching their heads this winter
Because of that extremely mild period of weather, Little Short Stop Stores “saw a bump this month in our ice cream sales,” says Gerry Bes, general manager of the chain. Its 28 stores are located in and around the twin cities of Kitchener-Waterloo, where a record high was also set on Feb. 15 of 14.2C.
“Warmer weather in February and March does impact sales of typical summer items like ice cream, slush drinks and cold beverages,” he notes.
On the flip side, rising mercury at this time of year can stop movement of winter products dead in their tracks.
For instance, sales of ice melt in the Greater Toronto Area plummeted year-over-year in February 2023 by 24%, according to an analysis by Berwyn, PA-based Planalytics, a global predictive demand analytics firm focused on weather.
Across the rest of Canada, the category was down 6%.
Clearly, weather can have a significant impact on retail sales. Evan Gold, executive vice-presient, global partnerships and alliances at Planalytics, says “anywhere from 2% to 5% of a lot of businesses’ top-line sales can be driven by the weather.”
That could be 5% growth – or decline.
“The real kicker is when you look at individual product categories. Different weather is going to drive different purchasing at different times of the year for every category,” notes Gold.
Managing the weather
So how can c-stores harness weather volatility and drive sales? For starters, Gold suggests they take advantage of their loyalty programs and social media channels to put out highly relevant messaging.
That could be to promote a fresh salad or slushy treat during a temperature spike or a hot soup and sandwich during a cold snap.
He also says brands are more than willing to work with retailers on promotions that drive sales during their slower months.
7-Eleven Canada, for instance, has partnered with Mountain Dew on a winter-focused Slurpee delivery promotion. It includes posts on Instagram, such as of a guy floating in a flamingo inflatable on a lake, sporting a toque while sipping a Blue Shock Slurpee. “It’s always cold at first, but then you warm up!” the copy reads.
Meanwhile, Unilever Canada’s ice cream novelty portfolio is “focused on driving growth throughout the seasons,” says Rameez Gulam, the company’s head of sales for ice cream in Canada. He adds that the focus is “on individual indulgence driven by super premium brands Magnum and Ben & Jerry’s.”
“C-stores that are season-ready all-year round have the best opportunity to meet consumer needs,” says Gulam.
Demand forecasting is a part of getting “season-ready,” whether winter, spring, summer or fall. C-stores, including Little Short Stop Stores, leverage historical sales data to calculate how much inventory to order.
Bes says this is particularly important for winter-based products that “for the most part you need to pre-buy.” Winter products include ice melt, windshield washer fluid, firewood and hot packs.
“No winter weather and you are holding on to inventory for a year,” he says. A lot of wintery weather and you could sell out of some categories and lose sales to, say, the local Canadian Tire. Bes remembers that happened to Little Shop Stores several years ago during a particularly snowy winter.
When it comes to inventory forecasting, however, Gold recommends a weather-based cleanse of your sales history. If you’re a store or chain in southwestern Ontario, that would likely mean removing that record high day in February for planning next winter’s inventory figures.
“If you don’t remove that volatile day from your sales history, you’re essentially planning for that same weather, and the odds are it is very unlikely to happen the very next year,” says Gold. “When you remove it, we analyze how much you should add back in to come up with an inventory plan."
This article was first featured on Convenience Store News Canada
