We have already recently looked at the potential impact of climate change and warmer weather on the financial system, but what could it mean for consumer behaviour and are we already seeing signs people are changing how and where they spend their money?

In fact, from our weekly shop to our annual getaway, we are already starting to make subtle changes, and if hotter weather is here to stay it could have big implications for some businesses.

COOL CUSTOMERS

It’s hard to think of a product whose sales are more dependent on the seasons than ice cream, and right now both at supermarkets and on the seafront as temperatures head into the 30s again sales are booming.

According to broker Jefferies and data provider Nielsen, ice cream sales across Western Europe were up by 16% in volume terms and more than 22% in value terms in the four weeks to 13 July against a 4% increase in value across all food categories.

Higher sales by value of ice cream and yoghurt, both of which have seen big price rises, helped disguise the fact sales were down in seven of the nine categories surveyed as lower volumes offset higher prices.

The big losers were chocolate, where volume sales fell 19%, and savoury snacks, where volumes were 9% lower than the same period last year.

All of which makes Unilever’s (ULVR) decision to create a standalone ice cream business containing Magnum, Ben & Jerry’s and Walls under the banner of The Magnum Ice Cream Company, so as to demerge it later this year, all the more interesting.

The business, which will be the biggest ice cream company in the world, is expected to list in London, New York and Amsterdam at the end of this year with a valuation of between £12 billion and £15 billion.

If there was any doubt the sector is hot, look no further than Goldman Sachs’ reported interest in buying into Froneri, the European ice cream joint venture formed by Swiss food giant Nestle (NESN:SWX) and French private equity group PAI in 2016.

In 2019, Froneri acquired Nestle’s US ice cream operations for $4 billion, giving it control of Haagen-Dazs and other Nestle brands, so the business as a whole is now valued at north of $17 billion.

CHANGING TASTES

Another winner from the hot weather, not unreasonably, is the soft drinks sector, according to Nielsen.

Sales by value in the four weeks to mid-July were up by 7.9% in value terms, marking an acceleration on the 7.7% rise recorded in the preceding four-week period.

As with ice cream, price was one driving factor with price and mix driving 5.2% of the 7.9% increase against 3.9% in the previous period.

UK-listed companies like Coca-Cola Europacific Partners (CCEP), Coca-Cola HBC (CCH), Fevertree (FEVR:AIM) and Britvic, now owned by Danish brewer Carlsberg (CARL-B:CPH), as well as US giants Coca-Cola (KO:NYSE) and PepsiCo (PEP:NASDAQ), have been making hay while the sun shines this summer.

Data from Nielsen shows strong growth in France, Italy, Spain and the UK in the period to mid-July, with Germany the only major market to disappoint.

In contrast to soft drinks, sales of beer dropped by 2.1% in value terms over the same four-week period, according to Nielsen, although in fairness in 2024 the UEFA European Football Championship took place at almost the exact same time so comparisons are somewhat distorted, and we would need to trawl through more datasets to get a clear picture.

Within household and personal goods, sales of deodorant typically increase in hot weather, as do sales of laundry care products, and this summer has been no different with Nielsen showing back-to-back growth for both categories during mid-May to mid-June and mid-June to mid-July.

On the other hand, sales of cosmetics seem to have slowed sharply this summer, although skin care products and in particular items such as cooling sprays and body wipes have been strong sellers.

While one summer’s takeaways obviously doesn’t establish a trend, if climate change means longer, hotter summers and wetter winters, as seems to be the case, then we would expect these shifts to become even more pronounced as time goes on.

GOTTA GETAWAY

Interestingly, climate change is already influencing when and where we go on holiday.

According to the Financial Times, ‘hotter weather is prompting rising numbers of British tourists to shun classic summer hotspots and travel later in the year’.

It appears we aren’t alone, as ‘Germans, and others, are showing signs of doing the same,’ says the report.

The latest survey of 6,000 holiday-goers for the European Travel Commission, which represents 36 national tourism organisations, found three quarters of respondents had made at least one change to their travel habits as a result of climate change.

The top three adjustments were choosing milder destinations, avoiding those with extreme heat and monitoring weather plans before booking.

Europe’s largest travel operator TUI (TUI1:ETR) has extended its autumn booking season and is now offering flights to Crete until mid-November instead of October previously, as well as offering year-round vacations in destinations such as southern Turkey as the travel season stretches.

Another shift is where we are choosing to go on holiday, with over half of respondents in the survey avoiding major hot spots – some of which, such as Venice and Barcelona, have seen popular demonstrations against ‘over-tourism’ – in favour of less popular locations.

‘Nordic and Baltic countries have experienced rising summer demand, with marketing campaigns promoting themselves as “coolcations”,’ says the report, noting if global temperatures continue to rise then northern European coastal regions could experience significant gains in summer tourism demand as visitors flee traditional southern European destinations.

For those willing to travel out of season, and to less popular locations, there could be savings to be had.

And if the weather here is going to be as hot as the weather abroad in future, it raises the possibility the UK could become even more of a tourist hot-spot not just for foreign visitors but for those who have yet to experience the joys of a ‘staycation’.

That could boost the fortunes of the hospitality and hotel industries with chains such as JD Wetherspoon (JDW) and Premier Inn, owned by Whitbread (WTB), enjoying bumper summer takings.

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