Snow disruption: Winners and losers

By Laurence Knight
Business reporter, BBC News

Image caption,
The snow left many customers unable to get what they needed

As temperatures briefly return to the right side of zero, retailers and transport operators will be among the many licking their wounds after the snow hit pre-Christmas business.

But the respite is set to be short-lived, with snowfall and sub-zero temperatures expected to return later on Wednesday.

So will businesses be able to make up for the lost trade in the few remaining days?

And are there any winners from the big freeze?

Losers: Travellers and commuters

Most people's thoughts will turn to the images of hundreds of holidaymakers stranded at airports, sleeping rough on the terminal building floor.

Image caption,
Brussels airport tweeted that it was running low on de-icer

London's Heathrow airport had to shut one of its two runways and cancel all short-haul flights, while Gatwick and Cardiff airports shut completely, although things are thankfully returning to normal now.

Brussels Airport reported on Twitter that it was running out of de-icer for its planes - a problem thought to be affecting several European airports.

"We have... seen reductions of up to 65% for major airports like Paris Charles de Gaulle, Frankfurt, London and Berlin Tegel," said Ken Thomas, in charge of operations at Eurocontrol, the European air traffic control body.

Meanwhile, rail passengers were faced with the havoc caused by broken-down trains, fallen overhead cables, and generally treacherous icy conditions.

Losers: Transport companies

But spare a (less angry) thought for the transport operating companies.

Airlines have suffered greatly from lost business at what is usually a peak period of travel.

British Airways is estimated by some analysts to have lost £10m a day during the freeze.

The impact on airport operators such as BAA is a little more ambiguous.

All those stranded passengers had to feed themselves, with the terminal building restaurants, cafes and shops the only available options, and the airports would have taken a cut of the additional sales under the concession agreements with their retailers.

But nonetheless, management may be smarting at the damage to their reputations caused by their apparent impotence to clear runways or even keep the toilets clean as their facilities were overwhelmed by so many unexpected guests.

Losers: Delivery and haulage companies

The danger of ice on the road was best illustrated over the weekend by a liquefied petroleum gas tanker that crashed on the M25.

Image caption,
Difficult driving conditions and road closures disrupted Europe's road haulage industry

It caused the closure of the London orbital motorway in both directions next to the key junction 5 exit for Dover, affecting trucks travelling to and from the Continent.

The German state of North-Rhine Westphalia took the threat of such road closures so seriously that it temporarily banned trucks from its motorways altogether.

Despite the disruption of the road haulage industry, there were few reports of any resulting shortages, in contrast to the previous cold snap at the beginning of December which resulted in bread and other foods disappearing from some UK supermarket shelves.

Christmas deliveries may be a different matter, though. The Royal Mail was reporting a serious backlog, and has called in 250 extra lorries to help it catch up.

Winners: Energy firms

With people being advised to stay at home (and many not needing the advice), demand for gas and electricity has risen.

Image caption,
Gas was in strong demand, although delivering it was sometimes a challenge

"If this winter wonderland continues, it's not only good news for Santa, but an early Christmas present for the utility companies too," said Jimmy Yates, equities analyst at spread-betting firm CMC Markets.

The extra European demand for winter fuel helped push already-rising energy prices to new highs, with Brent crude hitting $93.7, its highest level since September 2008.

That's good news for the oil majors, but perhaps less helpful for utilities who will not be able to pass the rising wholesale costs through to their customers immediately.

Losers: Most employers

Industries that require work out-of-doors, such as construction, are likely to be badly hit.

But staff absenteeism is the most immediate problem facing most companies, with employees either off sick or physically unable to get into work.

The problem can be particularly severe for small businesses, points out Howard Archer, economist at IHS Global Insight.

"Even the loss of a few employees may have to result in a complete shutdown if there is not enough staff to operate," he says.

Losers: High Street retailers

With a temporary thaw setting in, the big question for the country's shops and department stores is whether the cold snap means less Christmas shopping this year, or unbearably more Christmas shopping on the few warmer days.

John Lewis - whose weekly sales updates provide a useful bellwether of conditions on the High Street - had been on course for a record week of sales during the temperate weather last week.

Image caption,
Both shoppers and staff had trouble reaching to some retail complexes

But that was before sales plummeted 10% on the critical last Saturday before Christmas, thanks in part to the snow-forced closure of two of its 32 stores.

Figures from retail researchers Synovate showed Saturday footfall for the country as a whole was down 24.3% compared with the previous year, with the West Midlands, South East England and London being worst affected.

"The longer the severe weather persists, the greater the impact will be," warns Mr Archer at IHS Global Insight.

He worries that, while sales lost to bad weather can normally be made up on other days, with Christmas so close, many would-be shoppers may miss the opportunity to buy presents this year.

Losers: Online retailers (surprisingly)

In an earlier cold snap at the beginning of December, lower store sales were offset in part by a spike in online sales.

This time round, however, the story is different.

According to ecommerce industry group IMRG, many web-based retailers had been forced to decline or cancel sales because the snow was making it impossible to deliver in time for Christmas.

Amazon says that Christmas presents ordered after 18 December are unlikely to reach their destination in time.

Winners: Supermarkets

Even before the latest cold weather set in, British shoppers were indicating they would be more inclined to eat at home this Christmas.

Image caption,
Supermarkets may be among the few retailers to benefit from cold weather thanks to bigger food sales

According to research by IGD Retail Analysis, three-quarters of British shoppers said they intend to spend more on their Christmas meal this year, while a third would spend less on bars and restaurants.

"The wintry weather means shoppers are likely to go out less and to concentrate on food shopping," says IGD's chief executive, Joanne Denney-Finch.

That could be good news for supermarkets, who may get a bigger share of Christmas present sales this year.

Losers: Farmers

However, the cold weather has been a headache for the nation's farmers, who may struggle to meet any upturn in demand for food.

Vegetables such as cauliflower and cabbage are reportedly rotting after the damage inflicted by frost.

And many winter crops have been difficult to harvest with the ground frozen solid.

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