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Retail footfall continued to fall in February

Retail Sales

UK retail footfall continued to fall in February 2018 across most destinations, even before the impact of the bad weather at the end of the month, which was mirrored in relatively flat consumer spending.

Helen Dickinson OBE, Chief Executive, British Retail Consortium: 

“Retail parks fared better with footfall rising above the three-month average. These locations are typically home to furniture retailers whose offer of credit options paid off by enticing shoppers and boosting sales. 

“Looking ahead, there’s some hope that shopper activity will pick-up now that inflationary pressure has started to subside and wage growth is expected to move in the right direction. But this will offer only modest relief to retailers and consumers and the recent sad news announcing the closures of several well-known high street retailers should sharpen our focus to what is going on in retail in the UK at present.

“Retailers are facing into rapid structural change from digital evolution and rising operating costs. We know that there will be fewer stores in the future as portfolios are consolidated, so businesses and communities need to focus on repurposing physical space based on experience and refining the interplay with digital. For policymakers meanwhile, it is about recognising and acting on the disproportionate impact these headwinds are having on vulnerable communities up and down the country.”

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Diane Wehrle, Marketing and Insights Director, Springboard: 

The -0.5% drop in footfall in February was less than a third of that recorded in January and lower that the 12 month average of -0.7%, providing some good news in the face of the trading challenges for retailers reported recently.  The other good news was that the -0.9% drop in shopping centre footfall was better than the past five months, and could finally be a sign of the positive impact of investment by centre owners over the past few years.

Key to February’s result was an improvement in day time footfall.  Accounting for around two-thirds of total footfall, this dropped by just -0.6% compared with -2.1% in January. It demonstrates that consumers still have enthusiasm for making shopping trips, albeit they are cautious about spending, which is reflected in declining store sales in February.  

However, it is still tricky to get an accurate temperature reading of retail trading trends this year.  The current raft of closures amongst retailers and hospitality operators are at least in part due to overly bullish budgeting over the period from 2015, before the pre Brexit economic jitters; but clearly exacerbated by poorer than expected Christmas trading.  The recent snow and an early Easter will impact footfall in March, and so April’s footfall will also be affected.  A true like for like trading picture will therefore only be clear at the end of the second quarter meaning retailers will have to hold their breaths to know how 2018 is shaping up. 

Source: Insight DIY Team & BRC Springboard Footall

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12 March 2018

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