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Published on February 13th, 2015 | by The GC Team

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Retail Footfall: High streets and shopping centres lose out to out-of-town locations

Retail footfall declined in January as shopping centres and high streets both recorded a fall in shopper numbers.

According to the BRC/Springboard Footfall and Vacancies Monitor, January footfall was 1.2% lower than a year ago following a 0.7% fall in December. Shopping centres reported the largest decline, down 2.8%, while high streets experienced a 1.6% fall.

Footfall in out-of-town locations fared best, increasing 1.5% year-on-year.

The report also highlighted a slight increase in the national town centre vacancy rate in the UK, up from October’s rate of 10.3% to 10.4% in January 2015.

Helen Dickinson, British Retail Consortium Director General, said rising numbers of vacant shop units are still a cause for concern.

“We have welcomed the government’s pledge to review business rates on our recommendation; however, in order to make a real difference, the review will need to be wide in scope and seek radical solutions,” she commented.

“Many local councils are working hard on initiatives to inspire high streets and shopping centres to flourish and the BRC continues to support this work. Spreading best practice, such as supporting pop up shops, increasing digital connectivity and focusing on general town centre improvement, is crucial if we are to drive down a vacancy rate that remains stubbornly above 10%.”

Dickinson added that it was “heartening” to see retail footfall up 1.5% on January last year at out-of-town retail destinations. “This reflects strong consumer confidence,” she said. “More of us are happier to splash out on big-ticket items, particularly furniture, which we usually travel out of town to view and buy.

“January is traditionally strong for online sales and this year was no exception. This has undoubtedly impacted on footfall for high streets and shopping centres and is further evidence of the impact of our changing shopping habits. Retailers will be looking closely at these figures to help them harness the growth of e-retailing to drive consumers to their bricks & mortar stores. Click-and-collect services are an excellent example of how this is happening right now and innovations in this area are set to continue for some time to come.”

“As we’d expect, consumers are continuously shifting towards the most convenient way of shopping,” said Juha Mattsson, CMO and Retail Insights Director at analytics firm Walkbase. “Online stores have gained a lot of advantages there lately, and now it seems those retailers who are able to create a fluent path between online, in-store and mobile are growing in terms of the number of customers. However, the measure of footfall isn’t necessarily a measure of success – product engagement and purchases are far more accurate measures.

“What is clear here is that the high street needs to create an inclusive shopping experience that seamlessly combines the online and offline experience.”

Diane Wehrle, Retail Insights Director at Springboard, said the 1.2% drop in footfall across the UK in January is in stark contrast to the 1.6% increase in January 2014.

“This contrast is heightened further by the fact that it also comes in the face of a modest increase in retail sales in out-of-town locations, while sales in high streets and shopping centres declined. So while high streets and shopping centres still account for the majority of our shopping floor space, the ongoing strengthening of out-of-town locations is clear evidence that our urban shopping locations are losing market share.

“Without doubt this is due to both the challenge of the internet and the convenience of out-of-town locations for click-and-collect, as they offer plentiful, accessible parking that is free of charge.

“Despite this, it is good news that the vacancy rate has increased only slightly, to 10.4%, although the number of retail leases that are due to expire over this year suggests that this could rise further over the coming months, particularly as consumers are now demanding discounts, which squeeze margins and adversely impact profitability and long-term business sustainability.”

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