UK snowfalls keep Kiwi offshoot busy

Britain's heavy snowfalls this month have kept the team at a subsidiary of New Zealand's MetService busy.

Weather Commerce provides targeted forecasts for British businesses so they can plan for specific weather conditions.

A supermarket chain with hundreds of stores, for instance, will get a separate forecast for each site.

Firms then match historical data supplied by Weather Commerce with sales figures from the same period to make educated decisions when planning stock and staff levels.

During Britain's recent snowfalls, supermarkets using the service predicted a spike in demand, stocked up on products before road closures and avoided running out of items.

David Bailey, a senior data analyst for Sainsbury's, said the supermarket chain's customers had been panic-buying as a result of the snow storms.

But Weather Commerce's service meant the company had 10 days to plan ahead and make the most of the increased sales. Weather Commerce is set to become a wholly owned subsidiary of Metra, the international arm of New Zealand's MetService.

MetService chief executive Paul Reid said a fine weekend forecast meant a supermarket did not need to discount barbecue items like steak, sausages and beer because most people would buy them at full price.

Other British companies using Weather Commerce include supermarket chain Tesco, retailer Marks & Spencer and McDonalds.

But food suppliers as well as retailers use the service.

Reid said Metra acquired its 50 per cent share of Weather Commerce almost three years ago because it had unique intellectual property.

That acquisition came with an option to purchase the remaining half of the firm later on, which Metra has now confirmed it will do, with the company set to become a wholly owned subsidiary from March.

Reid said there was scope to replicate Weather Commerce's business model in other parts of Europe, as well as in Australia and New Zealand.

He said most New Zealand retailers were not yet using historical data and weather forecasting for business planning. "It's fair to say that the level of sophistication in the retail market in Europe is more advanced."

Reid said the 12 meteorologists employed in various parts of Britain by Weather Commerce worked from home through a secure website.

Metra also provides weather forecasting services for European traders in energy derivatives. Reid said a 3C drop in temperature would increase consumer demand for electricity and gas, driving prices up.

Some traders buy and sell tens of millions of euros worth of commodities daily, making the supply of weather forecasts to them a cut-throat market.

WEATHER EYE

Metservice

* New Zealand's state-owned weather forecasting agency, formed in 1992 and based in Wellington.

* Has around 200 staff across Australasia, Europe and Asia.

* Operating revenue of $37 million, with a net profit of $3.2 million, last year.

Weather Commerce

* Established in 1999 by two Britons.

* Provides targeted weather forecasts and historical meteorological data to British businesses to assist planning.

* Has 12 staff in Britain.

* Is 50 per cent owned by Metra, the MetService's international arm, with its shareholding increasing to 100 per cent in March.