According to retail insights company Springboard, retailers in the UK should exercise caution despite experiencing a surge in footfall in March. While this may seem like positive news, the report warns that it could be only temporary due to various factors impacting consumer spending. One of the major factors mentioned is the recent increase in energy and fuel prices, which is expected to result in reduced disposable income for consumers. This is especially concerning as the summer season approaches, and consumers prioritize saving money for vacations.
In terms of footfall figures, March witnessed a notable improvement compared to the previous month. With a decrease of -15.3% compared to 2019, this was a substantial improvement from February’s -20.7%. As a result, footfall levels in March were close to those achieved in November 2021 before the Omicron variant led to a rise in Covid infections. Examining specific locations, the decline in footfall from 2019 was highest in high streets, recording a decrease of -17.4%. Shopping centers experienced a decline of -21.3%, while retail parks saw the smallest decrease at -4.2%. Notably, high streets demonstrated a particularly positive improvement compared to the figures observed in February, which stood at -26.2%.
Additionally, Springboard emphasized that physical retail destinations face a long-term challenge due to the increasing adoption of hybrid home/office working. As more employees choose to work from home at least part of the week, footfall recovery, especially in large city centers, has been limited and is expected to remain so in the foreseeable future. However, it is essential to acknowledge that not all of the decline in footfall can be attributed solely to the pandemic. Even before the Covid outbreak, Springboard data indicated an average annual decrease in footfall of approximately -1.5% over the past decade as consumers shifted their spending online. As a result, the net impact of Covid on footfall currently stands at approximately -12%.
Looking ahead, the retail industry in the UK should be prepared for potentially challenging times. With the anticipated decrease in disposable income and the ongoing impact of hybrid working, retailers must adapt to consumer preferences and invest in online offerings to navigate the changing landscape and maintain customer engagement.
Useful links:
1. Retail Gazette: Tips for Retailers in Challenging Times
2. BBC: UK Retailers Face Challenges amid Economic Uncertainty
