Stormy Christmas ahead after sharp October footfall decline?

Footfall in October saw its lowest level since the EU referendum vote in June last year, new figures have shown.

In October, shopper numbers fell by two per cent year on year, compared with a dip of 2.3 per cent in June 2016.

Overall, the sharpest decline in footfall occurred in Northern Ireland, falling by 6.5 per cent, Scotland (-3.3 per cent) and South West (-3.1 per cent).

Footfall in Greater London fell by 0.4 per cent on the previous month.

The East was the only region to see growth in October, up by one per cent. This is the eleventh consecutive month of growth and higher than the UK average of minus two per cent.

The East and Wales were the only regions to growth on the high street of 1.4 per cent and 0.6 per cent respectively.

Retail parks continued to appeal to shoppers in the East and South-East, which were the only two regions to show positive growth for this retail destination.

Shopping centres saw a significant overall decline, falling by two per cent. Only in Greater did they fare better with positive growth of 0.2 per cent.

British Retail Consortium chief executive Helen Dickinson said: “All shopping destinations saw shopper footfall ease back in October, which mirrors the month’s paltry sales performance. Even retail parks, which have continually bucked the trend until now, struggled to attract as many visitors as the previous year.

“The picture improved slightly for town-centre vacancies over the past quarter, but this is to be expected in the run-up to Christmas as landlords are inclined to offer more flexible short-term lets to prop up their rental income over the festive period. Yet nearly one-in-10 retail premises still lie empty as the burden of business rates continues to stifle investment in new or refurbished stores in town centres and in less economically viable locations.

“Without decisive action from the Chancellor in his upcoming Budget, retailers face a stark £270 million leap in their rates bill from Apri – money that could otherwise be invested in stores and digital innovation. If reports over recent days of a potential cap on this increase come true, it would be a hugely welcome first step towards a reformed and more financially sustainable rates system over the years ahead.”

Diane Wehrle, Springboard marketing and insights director, commented: “October delivered a black trading cloud ahead of the Christmas sales storm. Not only was the two per cent drop in footfall the worst result for October since 2013, when it declined by 2.9 per cent, but it was also higher than the result for the month of October in subsequent years which ranged between -0.8 per cent and -0.2 per cent. The signs of the gathering cloud have been evident in footfall trends for a while; with the rolling three-month average dropping to -1.4 per cent, the lowest since June last year. Both high streets and shopping centres are clearly under pressure, with footfall during retail trading hours dropping by more than three per cent in each. And the fact that retail-park footfall slipped into negative territory – even during daytime hours – while prior to November recording seven consecutive months of growth, is definitive evidence of consumers tightening their purse strings.

“It is also critical not to read too much into the improvement in the vacancy rate to 9.3 per cent, from 9.6 per cent last quarter, as this is a trend that has occurred over the past few years as landlords fill empty stores with temporary lettings in the run-up to Christmas. Indeed, as trading performance comes under increasing strain, it is likely that landlords will increasingly resort to this approach, and so we may see the vacancy rate remain at this level well into the New Year. With possibly another two interest rate rises on the horizon, these results suggest that Black Friday, and the subsequent Christmas sales storm, will be typified by consumers battening down the hatches.”