UK Christmas footfall dips again, researcher warns on markdowns
When footfall research specialist Springboard talks about “footfall pains at Christmas”, you know that the news isn't going to be good. As it was, the company’s December report on Monday talked of a smaller decline than last year, but it was a decline nonetheless and was actually the 13th consecutive one that we’ve seen.
And the news came with a warning that discounting is now seriously damaging the once-lucrative Christmas season.
So what happened? The December figures – actually the five weeks from November 25 to December 29 – saw footfall dropping by 2.6%, which wasn't as bad as the 3.5% fall of the previous December, although there was a reason for that not connected to specific physical retail health (more of that later).
High streets declined by 2.1%, marking five consecutive months of weakening for this shopping location, and retail parks fell by the same amount.
Once again though, it was shopping centres that felt the full force of declining visitor traffic, which is bad news for the fashion sector as so many of its stores are located in shopping centres. Visitor traffic declined by 3.9%, which was broadly in line with the falls seen in previous years and also marked 21 consecutive months of declines.
Diane Wehrle, Springboard Marketing and Insights Director, said: “The decline in footfall, the ninth in 10 years, and the seventh consecutive year of decline, is undeniably strong evidence that retailers can no longer rely on Christmas trading to redeem revenue lost earlier in the year. Indeed, over the past seven years the shift in footfall away from December has been so significant that the gap between both December and July and between December and November in terms of footfall volumes has halved.”
She also thinks that it was always unrealistic to expect footfall to recover last month unless the “dynamics underpinning consumer demand were going to rapidly shift.”
In fact, it was only because the third week of December 2017 was so adversely impacted by snow that the same week in 2018 delivered only a modest drop in footfall of 0.1%. If footfall had remained at the level recorded in the first two weeks of the month (5.5% and 4.5% lower than in 2017), then the overall result for the month would have been a drop of more than 4%.
“If nothing else is learnt from December 2018, it is that discounting does not stimulate customer activity, and is severely eroding the strength of Christmas as a major trading period,” Wehrle added. “Ignoring the warning signs and continuing to bring sales forward undermines profitability and, ultimately, longer-term innovation in retailing.”
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