Retail parks see footfall boost in January
Retail parks saw growth in footfall in January, but they were the only destination to see an increase.
According the BRC-Springboard Footfall and Vacancies Monitor, footfall in retail parks rose by 0.9 per cent in January.
The South-East and West Midlands saw the strongest growth in this destination, at four per cent and 3.3 per cent respectively.
However, footfall overall decreased by 1.6 per cent year on year, which was a deeper fall than January 2017 at 1.3 per cent and the worst result since January 2013.
High street footfall fell by 1.9 per cent in January, a sharper decline on the 0.8 per cent seen in the same month last year.
Shopping centres saw a drop of 3.1 per cent in footfall in January, deeper than the three-month average of 2.8 per cent.
All regions experienced a drop in footfall for January, with the sharpest declines seen in Scotland (4.6 per cent), the South-West (2.6 per cent), and the East (2.5 per cent).
The decline in Greater London eased falling just 1.2 per cent, compared with the 3.7 per cent drop seen in December 2017.
The national town vacancy rate was 8.9 per cent in January 2018, down from the 9.3 per cent seen in October 2017. This was largely down to reduced vacancy rates for Greater London (5.6 per cent down from 7.1 per cent in October), Northern Ireland (14.3 per cent down from 15.2 per cent), and Scotland (9.2 per cent down from 10.5 per cent).
British Retail Consortium chief executive Helen Dickinson said: “January painted a picture of divided fortunes with a slight improvement in town vacancy rates but decline in shopper footfall. The latter fell in line with the underlying trend of reduced customer activity in shopping destinations, compounded by the squeeze on discretionary spending. Meanwhile retail sales continue to be buoyed by inflation, masking the lack of real growth.
“The more positive picture for vacancy rates over the last quarter is marginal. The Christmas trading period traditionally sees a boost in temporary lets, as landlords get creative with the flexible use of space to create pop-ups. This was particularly evident in London this year due to its denser physical retail offer. The long-term trend is that vacancies remain stubbornly at around nine per cent, albeit much higher in many areas.
“If we look beyond the seasonal distortion, the pressures to rationalise and downsize store portfolios are continuing to build as structural and technological change gains momentum. Given that planning applications for new shops have fallen for the ninth year in a row, the mounting cost of property taxation will inevitably mean more empty shops on the high street.
“Retailing is about digital and face-to-face interactions with customers and how the different channels complement each other. Having a business tax system that works to support that, not undermine it, is what the country needs and what we remain committed to work in partnership with Government to deliver.”
Diane Wehrle, Springboard marketing and insights director, commented: “A drop in footfall of 1.6 per cent is an improvement on December’s 3.5 per cent, but it is the worst result for January since 2013. So it is clear that the challenges facing bricks-and-mortar retailing are continuing to build – the 1.9 per cent decline in high street footfall is more than double the 0.8 per cent in January 2017 and shopping centre footfall continues to languish at 3.1 per cent following a drop of three per cent in January last year.
“In contrast, activity in retail parks continues to grow, with a shift in footfall from a 0.4 per cent fall in January 2017 to 0.9 per cent growth this January; despite furniture and household appliance sales in January being the worst of all 13 categories. Retail parks clearly now fulfil a wider role for shoppers; yes, they are convenient and functional shopping locations, but are buoyed by the continuing growth in online spending. Not only are they efficient click-and-collect points, but their attraction is enhanced by a wider offer, embracing hospitality. Herein lies the lesson for stores in urban locations of high streets and shopping centres; their longevity is contingent upon their ability to embrace all steps of consumers’ path to purchase, which implicitly necessitates a first class click-and-collect experience.
“While footfall dropped, the vacancy rate strengthened over the quarter to 8.9 per cent from 9.3 per cent in October, but caution is needed in reading too much into this, as it reflects short-term occupier demand in the lead up to Christmas and is a trend that replicates previous years.”