BRC- SPRINGBOARD FOOTFALL AND VACANCIES MONITOR – JANUARY 2018

Covering the four weeks 31 December 2017- 27 January 2018

  • Footfall in January decreased by 1.6 per cent year-on-year, a deeper decrease than the rate seen for January 2017 of 1.3 per cent. This is slightly better than the three-month average of -1.8 per cent, but below the 12-month average of -0.7 per cent.
  • All regions showed a drop in Footfall for January, the sharpest decline seen in Scotland (4.6%), South West (2.6%) and The East (2.5%). Greater London decline eased, footfall fell -1.2 per cent compared to December’s fall of -3.7 per cent.
  • High Street footfall fell by 1.9 per cent in January, a deeper decline than seen the same month a year ago (-0.8 per cent). This was below the three-month average of -2.1 per cent.
  • Footfall in Retail Park grew by 0.9 per cent in January above the three-month average of 0.2 per cent. The South East and the West Midlands saw strong growth here, 4.0 per cent and 3.3 per cent respectively. These were the only shopping destinations to experience growth in January.
  • Shopping Centre footfall fell by 3.1 per cent in January, a deeper decline than the three-month average of 2.8 per cent.
  • The national town centre vacancy rate was 8.9 per cent in January 2018, down from 9.3 per cent in October 2017. This is largely due 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 in October 2017, and Scotland: 9.2 per cent down from 10.5 per cent in October 2017.

 

Helen Dickinson OBE, Chief-Executive | British Retail Consortium

“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 9 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 

“A drop in footfall of -1.6% is an improvement on December's -3.5%, 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% decline in high street footfall is more than double the -0.8% in January 2017 and shopping centre footfall continues to languish at -3.1% following a drop of -3% in January last year.

“In contrast activity in retail parks continues to grow, with a shift in footfall from -0.4% in January 2017 to +0.9% 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.

“Whilst footfall dropped, the vacancy rate strengthened over the quarter to 8.9% from 9.3% 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.”