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Footfall in freefall: Retail slump at the end of 2017
Figures from the British Retail Consortium show a 3.5% drop - the steepest decline we’ve seen since 2013. The biggest dip occurred in Scotland, the South West and London, with London recording a 3.7% fall.
The figures are even dimmer for high streets, who saw a 4.6% drop from last year. Menswear retailer Moss Bros was forced to issue a profit warning, as were Debenhams and House of Fraser, all suffering as high street retailers slashed their costs early to try and win back consumer demand.
High inflation, stagnant wages, competition from online markets and Brexit uncertainty all combined to ward shoppers off their Christmas spending spree.
It’s also thought that promotions around Black Friday meant many Christmas purchases were pulled into late November, easing congestion later in the year.
Shift to online continues
There is a silver lining, however. Overall sales figures grew relative to last year, meaning that the retail crash is caused by a switch to online spending, rather than by weakened overall demand.
As a result, online-only retailer Boohoo saw its sales double in the run-up to December. Next, which recently revamped its online presence, also recorded stronger sales than anticipated. Retail parks benefited too, as consumers turned to click-and-collect services to avoid the high street scramble.
Wariness over expenditure is also thought to make consumers do more research – again, primarily online – before committing to a purchase. As a result, online shopping accounted for over 1 in 5 of all non-food purchases.
Food resists the web
Tesco reported its biggest ever Christmas this December, crediting its inclusion of fresh food: its fresh aisle outperformed all its other groceries by 4%. That said, Tesco was still outperformed by Aldi and Lidl, whose sales are up 16.8% from last year.
Overall food sales were up 4% from the same time last year, indicative of an overall shift towards experiential purchases – and that food is the one commodity we still prefer to buy offline.
Otherwise, all the figures show a clear trend – virtual shopping is on the rise, and companies that fail to modernise their offerings will find themselves left behind by the digital revolution.