A review of 2023 by MRI Software has shown that, despite facing a host of setbacks, retail footfall remained resilient last year.
Rising interest rates and escalating household bills placed strain on consumers and the retail sector. Seven storms in the space of four months (September to December), as well as ongoing rail strikes, resulted in three consecutive months of declining footfall from September to November.
However, overall 2023 footfall was +3.3% higher than 2022 levels, with the gap from 2019 narrowing from -14.2% to -11.5%.
February and April witnessed month on month rises across all destination types. This was primarily supported by February half term and the Easter break.
In contrast retail experienced a quieter than usual summer. Growing numbers of households were impacted by the end of fixed rate mortgages and additional monthly bills of at least £400. This also led to consumer confidence worsening, as referenced by GFK’s Consumer Confidence Index.
As the festive season approached and inflation eased, consumer confidence improved and footfall rose across all retail destinations. MRI believed this positive trend is indicative of the strategic investments made by high streets, retail parks and shopping centres in attracting visitors to their destinations.
It also noted that consumers, grappling with financial constraints, sought cheaper brands and ways to spread the cost, especially in the lead up to the Golden Quarter.
Although 2023 ended with inflation sitting at 3.9%, the impact of this will unfold over the coming months as consumers bed into 2024 and get to grips with the extent of their financial constraints.
Jenni Matthews, marketing and insights director at MRI Software, said: “As we look ahead to 2024, Consumer behaviour continues to evolve shaped by many factors including hybrid working and inflation, which makes it a challenging time for the retail sector as they grapple with these adjustments.
“2023 closed on a positive note with inflation sitting much lower than at the beginning of the year, and consumer confidence improving by over half setting the stage for a hopeful beginning to 2024.”
“Despite signs of improvement, the UK economy remains in a delicate position. While inflation has slowed, prices are still higher than what consumers would prefer. This will continue to impact spending power however should this remain stable we anticipate recovery as the year progresses with consumers gaining confidence in their financial situation and spending ability. International conflicts add another layer of complexity, likely to disrupt stock availability due to delays in products arriving from overseas.”
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