Downtowns and other shopping districts have had a “dull December,” ending a year of declining foot traffic and raising concerns that sales in the most important month for retailers will be disappointing. There are growing concerns about
Attendances to UK shopping centres, retail parks and high streets fell by 2.2% in December compared to the same period in 2023, according to data from analysts at the British Retail Consortium (BRC) and Sensormatic. The decline was driven by a 3.3% decline in shopping centers.
With the rise of online shopping, footfall is no longer a clear indicator of potential sales, but the figures will add to concerns about how retailers performed in the run-up to Christmas. .
A series of industry trading reports revealing how key periods have fared begins on Tuesday with figures for clothing and homewares chain Next, which is expected to gain market share.
Sainsbury's, Tesco and Marks & Spencer are also expected to perform well, but Quiz and Shoezone have issued profit warnings before Christmas, and some clothing and footwear retailers are expected to struggle.
Some food companies, including Morrisons and Asda, are also thought to be facing difficulties amid operational problems and intense competition, with prices dropping to 8p for a bag of festive vegetables.
Lidl's UK arm on Thursday revealed its Christmas trading figures for the first time as a retailer, showing a 7% rise in sales in the four weeks to Christmas Eve. However, Shore Capital analyst Clive Black said the discount supermarket chain added 3% space this year, so underlying growth is likely to be less than 4%. Ta. Food inflation in the UK is running at around 2%.
BRC chief executive Helen Dickinson said: “A dull December with fewer shoppers everywhere capped a disappointing year for UK retail footfall, meaning 2024 will be the second year in a row that footfall will fall.
“Even in the Golden Quarter [the final three months of the year]is typically the peak of shopping activity, and foot traffic declined throughout the period with little relief. Black Friday weekend produced more promising results, but was overshadowed by a lackluster Christmas season. ”
The weather has had an impact, with storms and many other weather events keeping shoppers at home, particularly in the south-west of England and Northern Ireland in December, and in Scotland, Wales and England, which were hit by Storm Bad in 2018. It was noticeable in the north. November.
Tough conditions may have encouraged online sales. Statistics from credit and debit card provider Visa show spending increased 2.3% year-on-year in the seven weeks ending December 20, led by a 6.1% increase online. It said department store sales rose about 7% as shoppers focused on electronics and home goods, with electronics sales up 1.3% but clothing sales down. .
There are also signs of improvement in hospitality businesses, with sales up 2.7% in the week to December 16 compared to the equivalent week in 2023, according to advisory firm CGA and RSM's Hospitality Business Tracker. Bar chains fared well thanks to the timing of the bank holiday and the return of Christmas parties, but pubs grew by just 0.7%, weighed down by inflation.
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Kien Tan, retail expert at PricewaterhouseCoopers, said: “Overall, despite the roller coaster of a situation, there will inevitably be winners and losers along the way, but the retail industry remains “Overall, we still expect a reasonably positive Christmas.”
Relatively mild temperatures, concerns about the general economy, and the prioritization of holidays after a wet and dark fall are also likely to have held back spending on discretionary items such as clothing, large furniture, and large appliances.
Mr Black said: “Despite the UK's real standard of living rising, British shoppers appear to be cautious and attuned to the weakening macroeconomic backdrop caused by the Chancellor's comments and the Budget. “The October budget seems to have sucked a lot of air out of the lungs of the economy.”
He said labor market conditions, interest rates and possibly higher-than-expected inflation levels are likely to shape the retail industry this year.
