The number of people visiting UK shops in July remains around 40% down on the same time last year – amid predictions that the proportion of sales taking place online will remain at historically high levels in the future.
The prediction came as the latest BRC-Shoppertrak Footfall Monitor suggested visitor numbers to UK shops were down by 42.1% in July. That’s a large drop but an improvement on the -62.5% recorded in June.
Springboard figures yesterday suggested that the number of people visiting shops in July was 39.4% lower than a year earlier. However, visitor numbers improved by a fifth compared to June, when non-essential retailers were able to start reopening.
At a time when footfall has been hard hit, Hammerson yesterday said it was starting to change its approach to leasing in order to reflect the realities of omnichannel retail. It is also raising cash to recapitalise and reposition the business.
Both sets of footfall figures show falls across all types of location. According to the Springboard figures, footfall in high street (-47.2%), and in shopping centres (-47%) remained well down on last year but showed the fastest improvement compared to June. Retail park visitor numbers were down by 19.9% on last year.
The Shoppertrak figures show footfall down across high streets (-47.5% YOY), retail parks (-22.4%), and shopping centres (-48/1%). All of the figures represent an improvement from June, when footfall to high streets was down by 64.5%, retail parks by 33.8% and shopping centres by 68.3%.
Springboard now predicts that online spending will remain at high levels as shoppers continue to work from home and as unemployment rises.
Diane Wehrle, marketing and insights director at Springboard, said high streets and shopping centres faced a greater challenge that retail parks in reassuring shoppers of their safety. She said it was too soon to say what effect the introduction of mandatory face coverings in shops in England would have.
She said: “Whilst July’s result is the most positive since the pandemic, it comes with a note of caution; all of the key changes that are recognised as obvious boosts to footfall have now been implemented, and yet bricks and mortar destinations are still only attracting six out of every ten shoppers that visited last year.
“We know that the significance of online spending now exceeds the CRR’s forecast for 2028, and it is unlikely to retract back into the starting blocks with many consumers having acquired new shopping habits, but other key factors that will constrain footfall are the lack of tourism, the fact that so many people continue to work from home and rising unemployment, as businesses feel the impact on their revenues of the lockdown and the ongoing social distancing requirements. This is demonstrated by the fact footfall is significantly lower in large towns and cities that are a focus for workers and overseas tourists. The most extreme example is Central London, which is more reliant than anywhere else in the UK on a combination of tourists and workers, and where footfall in July remained 69% lower than in 2019.
“With current discussions bubbling over about how we get the schools back in September and expert views that in order to do this sectors of the hospitality sector may need to close, the improvement in footfall over the coming weeks is not likely to be any more than gradual. A further key factor that will inevitably constrain the ongoing recovery of retail, whether it be online or bricks and mortar, is the impending recession which we know is just around the corner.”
Meanwhile, Helen Dickinson, chief executive of the British Retail Consortium, said: “July was the first full month in which shops were allowed to open in all parts of the UK. While retailers will welcome the improvement in footfall across all shopping destinations, it remains well down on pre-coronavirus levels. The reopening of pubs, cafes and restaurants has also provided some additional footfall to many high streets, including a small boost to local retailers. It remains too soon to say how well retail will recover in the coming months, but it clearly remains a difficult trading period for many physical retailers.”
Andy Sumpter, retail consultant EMEA at ShopperTrak, added: “As footfall across parts of Europe has faltered recently, retailers will be hoping that the UK’s slow-and-steady recovery will continue. Furthermore, data from the US has shown that states that mandated face coverings first benefited from improved footfall recoveries, so we’ll be looking for the same here too in the coming weeks.”
As footfall continues to be well below last year, shopping centre developer and operator Hammerson yesterday said that it planned to change its approach to retail leases in a way that reflects the realities of omnichannel retail - where a growing proportion of sales take place online.
The group will also raise £825m through a rights issue and by selling Via Outlets, a portfolio of premium outlets in Europe.
Hammerson chief executive David Atkins said: ”The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK’s historic leasing model has served its time. It is outdated, inflexible and needs to change. We are introducing a new UK leasing approach - one that is simpler, reflects an omnichannel retail environment and rewards positive performance on both sides. It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year."
Atkins said the cash-raising transactions would recapitalise the business and reduce debts by a quarter. He said: ”This will help us to deal with these unprecedented conditions while enabling us to reposition Hammerson further. Looking forward, we will continue to dispose of assets and recycle capital from across the portfolio as we create a business focused on flagship destinations and mixed-use City Quarters over the medium term.
"The extraordinary disruption caused by Covid-19 on the retail property sector, the economy and society as a whole is reflected in these half year results, however, in recent weeks we have seen an encouraging increase in footfall as confidence begins to return amongst visitors to our flagship destinations."
Hammerson operates shopping centres including Birmingham’s Bullring and Bristol’s Cabot Circus (pictured).