Sep 11, 2017
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Tourist traffic fails to halt UK footfall drop, but retail parks boom says BRC Springboard

Sep 11, 2017

We got more evidence on Monday of some of the contradictions in UK retail at present as another report came out showing consumer spending rising slightly but footfall dropping.

Tourists may have been out in force but they couldn't stop a UK footfall decline

Visa said spending last month was up 0.3% year-on-year on an inflation-adjusted basis. While that still adds to 2017 being the weakest year since 2013, it was nonetheless an increase.

And it came despite footfall in August being down 1.2%, the regular British Retail Consortium/Springboard report showed. That fall was below the three-month and 12-month rolling averages of -0.4% and -0.3% respectively

The strongest performance came from retail parks where footfall rose 1.6%. These destinations really do seem to have benefitted from changing shopping trends all year. Thats partly because of their strong mix of shopping and leisure with cafés, restaurant and cinemas adding to their appeal. But it’s also due to their retailer mix changes. Once upon a time retail parks were full of supermarkets and DIY stores. But today, fashion and homewares are adding to the mix, while those supermarkets are also upping their fashion offer.

But elsewhere the news wasn’t so good. The strong run of higher footfall to high streets really does seem to have ended with a decline of 2.6% last month, worse than the 2.1% July drop.

Shopping centres didn’t do too badly in the circumstances though. Their 0.8% decline was better than the 1.3% fall a month earlier.

Regionally, the East, South East and Wales were the three regions that saw footfall growth in August, with the fastest growth in the East, which has now seen nine months of consecutive footfall rises.

But East Midlands high street footfall declined further to 4.9% in August, marking six months of consecutive year-on-year declines.

Overall the steepest decline in footfall in August occurred in Greater London (-2%) and Northern Ireland (-2.3%). This was the second consecutive month of negative year-on-year growth after a period of recovery for the capital, contradicting some reports that suggested London is being carried through this difficult period by its strong tourist traffic.

So what’s going on here? Diane Wehrle, Springboard Marketing and Insights Directo, said at least part of the reason for more subdued footfall was a rise in online activity, in terms of both value and volume. Online sales rose by 11%, the greatest rise this year. it was significantly up on the 6.2% last August and the 8.3% in July this year. The uplift in online sales volumes at 8.7% was a third higher than the 5.5% in July, with the increase in transactions via mobile devices of 27.6% being higher than in any month since October last year.

In part the rise in online activity will have been a result of much cooler, rainy weather this August than in 2016 which undoubtedly discouraged some shopping trips. “However, it is also a function of increasing inflationary pressures, driving consumers online in a search for lower prices which is likely to only become more significant as inflation continues to increase its bite on household budgets,” she said.

BRC chief Helen Dickinson added that it’s crucial to encourage shoppers back to more of town centres and to reduce the high number of vacant premises “and the increasing gap between the vibrant and in-demand areas and those at the much more economically fragile end of the spectrum.”

“These areas clearly have their work out to attract custom with the right mix of retail, leisure and other facilities and ensuring ease of access and parking,” she added. “From a retailer point, the sheer cost of doing business on our high streets has direct implications for the affordability of retailers’ investments in new or refurbished stores.”

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