Thermal comfort and retail sales: A big data analysis of extreme temperature's impact on brick-and-mortar stores

Jonghyun Yoo, Jiyong Eom and Yuyu Zhou

Journal of Retailing and Consumer Services, 2024, vol. 77, issue C

Abstract: The effect of weather on retail sales has long been of great interest to both the business and academic fields. This study investigated the impact of extreme temperatures on brick-and-mortar retail stores in Seoul, Korea. Using a comprehensive credit card transaction dataset, high-resolution weather data, and a semiparametric model, we found a significant increase in sales during extreme temperature events: 4% during heatwaves exceeding 35 °C and 11% during cold spells below −15 °C. This finding is supported by the thermal comfort hypothesis in retail sales, which suggests that consumers are driven to temperature-controlled indoor environments and are inclined to purchase products that provide thermal comfort, such as hot or cold beverages. As extreme weather events become more frequent owing to climate change, accurate sales forecasting during such conditions becomes crucial for retailers. Insights from our research enable retailers to better predict sales under extreme temperature conditions and to strategize accordingly, such as by highlighting thermal comfort products or ensuring optimal indoor temperatures with efficient air conditioning or heating systems.

Keywords: Extreme weather events; Retail sales; Brick-and-mortar stores; Thermal comfort; Climate change impacts; Heatwaves; Cold spells (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:77:y:2024:i:c:s0969698923004502

DOI: 10.1016/j.jretconser.2023.103699

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