For big supermarket chains, retail profits depends on meeting customer demands on a large number of Stock Keeping Units (SKU) across hundreds of stores. Weather is a key factor which influences customer behaviour and demand. When there is a heatwave in the summer, the supermarket can see sale increase in barbecue foods, ice cream and sunglasses. Cold weather sees sales of cauliflower soup, longlife milk, sausages and root vegetables soar.
Weather information needs to be taken into account in the demand forecasting system to ensure positive weather events are leveraged in advance and the optimal sales window is achieved. By analyzing historical sales against actual weather, a sales forecast can be created based upon both short and long – term weather forecasts. The forecast helps the supermarkets make informed decisions to ensure they meet customers’ demand at the right time.
