The retreat from the high street is accelerating in the run up to Christmas with customer footfall dropping at its fastest pace last month since the recession.
The number of people visiting town centres and shopping centres has been in gentle decline for almost a decade but the latest data from the British Retail Consortium (BRC) and Springboard suggests the trend is intensifying.
Footfall in November was down 3.2% on the same month last year - the twelfth consecutive monthly decline. Every region of the UK was affected except Northern Ireland.
Springboard predicts the fall in passing trade is set to continue this month - a key one for retailers - with the number of shoppers out and about down 4.2% on December last year. If that forecast comes to pass, Springboard says we can expect some retailers to go bust in January.
- Diane Wehrle, Marketing and Insights Director at Springboard
Every Christmas trading period produces winners and losers but last year many of the losers - from Maplins to House of Fraser - ended up becoming insolvent. Christmas is always billed as “make or break time” for retailers. This year, more than ever, it feels like no exaggeration.
Shopping is moving online and a host of established high street names are losing sales as a result. Many also finding themselves locked into long leases on stores with rents that look increasingly unaffordable.
The analysts I speak to variously have the likes of Debenhams, Carpetright, Karen Millen, LK Bennett, Clintons, New Look, Warehouse, HMV and even Gap and Sir Philip Green’s Arcadia Group on their “watch and worry” lists. All of them need a good festive period.
The BRC/Springboard analysis shows that Black Friday did the old order no favours. The promotions last month appear to have driven spending further online and into the arms of their so-called “pure-play” rivals like ASOS and Amazon.
The research also detects signs that shoppers are nervous about the outcome of tomorrow’s meaningful vote and what follows.
“Retailers will be hoping Parliament can secure a transition period to allow businesses to adapt to life outside the EU. Without this transition, consumers face higher prices and less choice on their shopping trips,” says Helen Dickinson, chief executive of the BRC.
The link between footfall and retail spending is not absolute but there’s enough circumstantial evidence here to suggest 2019 will be as brutal as 2018.
Look around you, the competition is ferocious. Online, in shop windows, the sales are already underway and the discounting is colossal. Prices are being cut, profit margins are being squeezed. There will be blood.