An Ideal Storm: How Businesses Are Reacting to Changing Weather

Talk about the weather may be a British cliché but, for businesses, it is far more than idle chatter. While Oscar Wilde may have disapproved of the talk as being “the last refuge of the unimaginative,” weather patterns are increasingly unpredictable and consequential. From heatwaves to floods, climate volatility is reshaping consumer behaviour, disrupting supply chains, and creating both risks and opportunities for companies. In this article, we discuss how businesses can be caught out by changing weather patterns and how others are adapting to once-in-a-lifetime weather events, which are happening all too often.

According to the British Retail Consortium, the weather ranks as the second most influential factor on consumer spending, just behind the economy. Seasonal preferences are nothing new, but a departure from seasonal norms can significantly alter shopping habits. Based on research by Barclays; colder, greyer conditions during spring and summer tend to hurt consumer card spending as shoppers retreat indoors, reducing their purchases of seasonal outfits, barbeque food, and outdoor dining. However, when temperatures rise above seasonal averages, other products benefit. In the UK, unexpected heatwaves drive a surge in demand for classic warm-weather staples. For example, prior to UK temperatures soaring in April, retailer Aldi was on course to sell almost two million sausages and over 1.5 million burgers as Brits embraced the BBQ season earlier in the year. This represented a 25% increase compared with the same time last year, equivalent to mid-summer heatwaves. However, not every business benefits from Britain’s warmer spells. Greggs, the bakery chain, issued a profit warning earlier this year as customers shunned hot pastries like sausage rolls and steak bakes in favour of cooler alternatives. Pre-tax profits fell 14.3% in the first half of the year, and its share price has dropped circa 40% year-to-date. While weather alone was not to blame, the episode exposed a challenge faced by a climate-sensitive sector, highlighting the need for businesses to adapt to changing consumer demand as a result.

Another sector hurt by climate variation is UK renewable infrastructure trusts. Greencoat UK Wind and The Renewable Infrastructure Group (TRIG) faced headwinds in the first half of 2025. Disappointing results were partly attributed to unusually low wind speeds as Greencoat’s electricity generation was reported 13% below budget. Despite producing nearly 5,484 GWh, enough to power two million homes, the power generated was significantly below expectations. This materially impacted the company’s net asset value. Future power generation expectations have fallen, contributing to a 5.2% decline over the six months to July. Investment in renewable infrastructure, such as wind, is required, but climate change introduces variability in the resources this infrastructure depends on. Variations in wind speeds can introduce significant changes in cashflows, which makes the performance of these investment vehicles lumpier and less attractive to investors. To combat this, firms are integrating different methods to generate power and diversifying their portfolios to smooth cash generation.

These examples show how companies can be reactive to weather conditions. But others are taking a forward-thinking approach to the opportunities presented by climate change. British equipment rental firm, Ashtead Group, has seen an increase in demand for essential machinery to conduct disaster relief efforts, including hurricanes and wildfires across the US. Although hurricane-related services accounted for a small portion of its total revenue, US$90-100m in 2025 to the time of writing, the company views this as a strategic growth area. It is now integrating disaster response capabilities into its broader Sunbelt 4.0 initiative, positioning itself to support increasingly frequent climate-related emergencies. Another beneficiary is Kingfisher, owner of B&Q and Screwfix. The company has identified extreme weather and rising energy costs as sources of demand in climate-resilient home improvement products. Recently, the company has expanded its Extreme Climate range, offering items such as sealants, insulation, and smart heating controls to help protect against increasingly volatile climate conditions. Similarly to Ashtead, these products currently represent a modest share of total revenue, but Kingfisher views this as a growth area and aims to generate 60% of sales from items that enhance efficiency and weather resilience by the end of 2025. Although it might be in 2026 when we know if this sales target has been achieved, this positions Kingfisher as a key player in helping households adapt to a changing climate.

Overall, one thing is clear: climate unpredictability is becoming more predictable. If businesses do not want to be blown away by a wind of change, they need to prepare their business models for the next heatwave or downpour. This will be easier for some than others. Retailers that prefer to keep minimal inventory may have trouble reacting to short-term spikes in demand for climate-sensitive products. Supply chains will need to adapt to this new reality. Smaller businesses could struggle to absorb the additional costs that comes with climate planning. The climate may be unpredictable, but resilience to it will become a competitive advantage.

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned. Investments and income arising from them can fall as well as rise in value. Past performance and forecasts are not reliable indicators of future results and performance. The information and views were correct at time of publishing but may have changed at point of reading.