Lacklustre high street in build-up to Christmas

high street Christmas

Footfall and retail sales growth on the high street has been lacklustre in the weeks leading up to Christmas, with heavy snow and Black Friday blamed.

According to latest Retail Traffic Index, compiled by Ipsos Retail Performance, it has been a disappointing start to December with high street traffic down by 9.9 per cent year-on-year over the first three weeks of the month.

Ipsos said heavy snowfall across the country severely impacted on footfall on December 10, when numbers across the UK plummeted by 21 per cent week-on-week.

The West Midlands and eastern England were the areas worst affected, with footfall nose diving by 57 per cent and 39 per cent respectively.

Ipsos added that while the fortnight of Black Friday promotional activity in November pulled forward some seasonal shopping, it throttled demand in the first three weeks of December.

“Whilst Black Friday wasn’t spectacular for retailers, it has had a significant knock-on effect to shopping activity in December,” Ipsos retail intelligence director Dr Tim Denison said.

“Widespread promotional activity and deep discounting hasn’t succeeded in pulling the usual numbers of shoppers into stores. We had anticipated a slow start, but we did expect the high street to be busier than it has been.

“The heavy snowfall will have done retailers no favours in kick-starting seasonal spending. Many people will have stayed at home and switched to shopping online, but a strong Christmas performance always relies on that festive spirit and bonhomie that is created in shops and shopping centres across the UK.”

Retail intelligence firm Springboard, whose monthly footfall figures in collaboration with the British Retail Consortium are closely-watched by the industry, has also recorded a downturn of footfall in the first few weeks of December – which it also attributed to heavy snowfall.

It said that UK high streets took on the impact of the weather with numbers falling 3.7 per cent week-on-week while footfall rose by 2.9 per cent week-on-week in shopping centres as these locations are largely protected from the elements.

Springboard now predicts footfall figures will decline by 7.6 per cent year-on-year in the week leading up to Christmas Day, despite the annual “man-dash” of last-minute gift shopping.

“Given the prevailing economic conditions which have put pressure on spending, and the fact that the weekend offers consumers an opportunity to travel to their Christmas destinations over the weekend, we are forecasting that footfall overall will decline on both December 23 and Christmas Eve,” Springboard insights director Diane Wehrle said.

Meanwhile, the latest monthly CBI Distributive Trades Survey has reported a weaker-than-expected rise in retail sales in the year to December.

The survey of 109 firms found that 37 per cent of retailers said sales volumes were up in December compared to a year ago and 17 per cent said they were down – giving a balance of 20 per cent.

Retail sales and orders reportedly disappointed expectations of stronger growth.

However, growth in online sales remained at a pace just below the long-run average, indicating that buying over Black Friday and Cyber Monday were “unspectacular”.

CBI principal economist Alpesh Paleja said: “Retailers have seen decent growth heading into the vital Christmas trading period, although it was weaker than expected.

“Notwithstanding the sales growth seen in the last couple of months, underlying trading conditions are tough for retailers. We expect the squeeze on real pay for households to last a while longer, so retailers will still face challenging conditions ahead.”

The news comes as a long-standing consumer confidence index from GfK shows that consumer sentiment in December dropped to all time low for 2017 and marked almost two years in negative territory.

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