Falling footfall on the UK’s high streets is not all about retail moving online, according to analysis of the latest figures – it’s about challenged consumers not spending, either online or in stores.
Diane Wehrle, marketing and insights director at Springboard, says consumers are affected by inflation, a slowdown in house prices, and growing debt. They may also be cautious about spending, given the recent failures of retailers – and the knock-on effects for consumers.
Her comments came as the number of people visiting UK retail stores fell almost across the board in September, according to footfall figures out this week.
Total UK retail footfall fell by 1.7%, compared to the same time last year, the BRC-Springboard Footfall and Vacancies Monitor shows. Visitor numbers to high streets (-2.2%) and shopping centres (-2.5%) were both down, although visitors to retail parks were 0.1% ahead of last year.
Wehrle said the figures were “further evidence of the current challenges facing bricks and mortar retail”. She added: “Whilst it would be easy to put this down to the shift to online spending, the story is not nearly as cut and dried. With the growth in non-food online sales in September of +5.4% being the lowest since January and just half of what it was in September 2017, combined with the highest level consumer credit for five years, a recent increase in inflation, a 20% drop in new car sales which is the worst since 2008, and the rise in house prices only a half what it was a year ago, all indicators point to the fact that footfall is simply reflecting the underlying constraints on consumer spend generally.
“In addition, the recent well publicised high street failures are likely to have made consumers more cautious about committing to large purchases in a number of our leading high street brands, either online or in bricks and mortar stores. With all of these pressures, and the continued mild weather minimising the impetus to renew fashion items for autumn,autumn, at least some of the impact on footfall will be a consequence of consumers focusing on paying down debt and shoring up their finances in advance of the Christmas period.”
Helen Dickinson, chief executive of the British Retail Consortium, contrasted increased prices with “little” real wage growth.
“This month’s footfall figures are yet further demonstration of the increasingly difficult operating environment British retailers are facing,” she said. “And yet, the country’s largest private sector employer is not seeing any action from Government to help.
“The retail industry pays a disproportionate amount of tax, representing 5% of the economy and paying 10% of business tax and 25% of business rates. The system is skewed towards high taxes on people and property which is contributing to store closures and job losses, stalling the reinvention of our high streets. The Government urgently needs to reduce the business rate burden and create a tax system fit for the 21st century that more fairly distributes taxes right across the economy.”
Image: InternetRetailing Media/Paul Skeldon