Nursery Today magazine

High Streets prove resilient

Out-of-hours visits boost footfall as analysts start to see Brexit impact

Shopper activity has proven resilient in the third quarter of this year, with a growth in footfall outside of store trading hours showing an increasing significance of trips to retail destinations for leisure or experience rather than just shopping.

The figures come from Springboard’s Footfall Review Q3 2016, which is the retail data specialists’ first chance to observe how Brexit, the greatest change in the political and economic landscape for decades, is starting to play out in terms of impacting on shopper behaviour.

The report was prepared before last week’s High Court judgement that Parliament must vote on when and how the UK leaves the EU by triggering Article 50, but shows that consumer confidence improved as the July to September quarter progressed, and High Streets are proving more resilient than “tired” shopping centres in retaining customers.

Retail sales rose by 0.2 per cent on a like-for-like basis, moving back into positive territory from the 0.4 per cent drop in Q2, although sales were stronger in July that either August or September.
The growth in online sales also dipped in August but accelerated again in September to increase by 10.2 per cent with the pattern of both overall and online sales over the quarter following the same pattern as in Q3 last year, demonstrating the diversion of spending away from retail that occurs during the holiday period in August.

By far the greatest rate of growth in online transactions occurred in the use of mobile devices with growth of 31.6 per cent in Q3 compared with growth of just 8.7 per cent in desktop transactions and three per cent in transactions via tablets.

However, the growth in the volume of online transactions slowed significantly to +15.1 per cent in Q3 from+ 30.2 per cent in Q2 and +29.5 per cent in Q1.

Footfall across the UK dropped by 0.4 per cent in Q3, an improvement on the drop of 1.7 per cent in Q2, and the 0.9 per cent decline in Q3 2015.

In High Streets footfall saw increases in July and August and a modest 0.5 per cent drop in September, resulting in an 0.2 per cent rise overall wholly driven by more traffic post-5pm.
Between 5pm-8pm footfall rose by 3.1 per cent, with an even more significant five per cent rise later in the evening, more than offsetting the 1.4 per cent drop within normal shop hours.
The overall 2.1 per cent decline in shopping centre footfall was more keenly felt in smaller malls, reaching 3.3 per cent down in centres under 100,000 sq ft, and -2.9 per cent in those up to 250,000 sq ft – the opposite pattern to Q2.

As with High Streets, the after-hours footfall helped hugely with a 1.1 per cent increase after 5pm and +6.3 per cent beyond 8pm, clearly demonstrating there is an appetite among consumers to visit centres for reasons other than retail – the report added: “The early evening period has benefited already from a plethora of coffee shop opportunities.”

In retail parks there was only a marginal 0.1 per cent drop in footfall both between 9am and 5pm, and after 5pm with a 1.6 per cent increase after 8pm.

Springboard concluded: “Despite the impending prodigious change in our economic landscape, and the impact that the prospect of this has already had on some key economic indicators, shopper activity in our retail destinations was resilient in Q3, with a softening of the decline in footfall compared with the last quarter and Q3 last year.

“However, there are a number of underlying trends not necessarily immediately obvious from the headline UK footfall rate that became more evident in Q3, and which signpost the likely future direction of travel for retail destinations.

“Firstly, the results reinforce what has been acknowledged as an emerging trend over the last year of an increasing significance of trips to retail destinations for leisure or experience, rather than purely for retail purposes. The growth in footfall outside of retail trading hours, accompanied by a drop in footfall between 9am and 5pm in all of the three destination types, is a clear indication of this.

“At the same time, the significant uplifts in footfall in retail parks recorded over the past couple of years are easing off. While footfall to out-of-town retail destinations is still increasing, it is inevitable that the new patterns of consumer activity – created through significant enhancements in their offer and appearance – have now become established, with smaller incremental upward shifts representing the norm from now on.

“Alongside this is the relative underperformance of shopping centres during retail trading hours, with High Streets now proving to be more resilient in retaining customers than shopping centres.

“Given the continued predominance in shopping centres of multiple operators, which traditionally have been highly attractive to consumers, it suggests that other factors such as the appeal of centres’ environment and ambience might be the issue.

“It is well known that many centres have become tired and are in need of uplifting but have not received sufficient investment, leaving them lacking in appeal for shoppers whose standards and expectations in all aspects of the shopping experience have risen.

“The backdrop to all of this is retail spending which flattened slightly in Q3, alongside a noticeable slowing of the growth in online spending in terms of both value and volume. The combination of this with the further weakening of consumer confidence, particularly around the general economic situation over the next year, suggests that the performance of both footfall and retail sales is likely to harden over the subsequent quarter to the end of 2016.”


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