How much does weather affect supermarket sales? Apparently, quite a bit. At least enough to justify British retailer Sainsbury’s investing in supply chain improvements to allow faster reaction to unexpected changes in the weather (Sainsbury’s tests new technology to trim food waste, Jun 11, BusinessGreen.com).
Sainsbury’s has invested in new technology that will allow the retailer to make real-time supply chain decisions aimed at reducing food waste caused by unexpected weather.Weather plays a big role in consumer buying patterns, according to the company, such as driving purchases of comfort fare when it is cold or lighter foods when it is warm.
Unpredictable weather, however, wreaks havoc on the plans of its company buyers, often resulting in perishable food left languishing on shelves, uneaten. There were six periods of unexpected weather last year, Sainsbury’s said. The supply chain technology will give Sainsbury’s the ability to make real-time decisions on where to send food from its warehouses, rather than changing course overnight. It has the potential to reduce food waste by 15 per cent during unexpected weather, while also reducing its carbon footprint by an estimated 1,400 tonnes.
There are obvious advantages to having a more agile supply chain (and one of Sainsbury’s main competitors, Tesco, is reported to have made similar investments). However, I wonder if it is really sufficient to able to decide what you are going to dispatch to a particular store in the morning as opposed to having to make that call the night before. Is that really enough to catch a shift in the weather? That may be enough to help when weather turns out to be unexpectedly bad (assuming bad weather lowers sales); the firm can then reduce the amount of perishables sent to a particular location. However, does it help when the weather is unexpectedly good? You can only ship what is in the warehouse, so to catch a fortunate uptick it would seem that you might need greater speed upstream.
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Totally true, this may only work when you want to reduce supply, but not necessarily when you want to increase it. This will reduce the footprint for the retailer, but nut necessarily for the supplier. Footprint wise they are just sending the problem elsewhere. Great post!