Reports of the death of the high street have been greatly exaggerated but there are new challenges on the horizon, says Springboard’s Diane Wehrle
Our figures show that high street footfall rose 0.8% in December compared to the previous year, while overall footfall fell by 1.1% for the 12 months as a whole.
Footfall dropped across high streets, retail parks and shopping centres by 0.2% in December which suggests the decline in footfall is slowing, but much of that came from the uplift on high streets. Retail parks have been growing for a number of years but that growth is slowing, while shopping centres were the worst hit in terms of footfall declines.
It seems that footfall on high streets made its losses early and has now stabilised – they are losing on average 1% a year.
There is a greater move to leisure experiences and high streets have generally adapted more quickly than shopping centres. The premium shopping centres generally have good leisure facilities but most of the mid-market ones will have a food court at best. Earlier shopping centres are predominantly retail-focused, which is where the challenges lie.
The problem shopping centres face is that change doesn’t come quickly as there is a generally a single owner and a single manager so they often need a whole strategy change. The property market hasn’t got a lot of appetite for investment at the moment. Smaller centres with more innovative owners can sometimes move quicker, and the impact on a smaller centre can be much greater and requires less capital investment.
The rate of growth at retail parks has also slowed because gains have been made in previous years. There could be more growth to come but it needs an agent of change, either to make them bigger, diversify to a greater degree or make them better hubs for click-and-collect.
The momentum created by the rise in high street footfall in December could continue, encouraging landlords to become braver. Some high street properties will probably never return to retail.
There are constraints remaining for the high street though, such as the cost of car parking, congestion and improvements to the public realm where there is still lots to do.
The figures suggest that we have come to the end of a period of significant decline in footfall in the high street, and that many high streets have already made progress towards encouraging different types of footfall. The transactional side of retail is now often done online so retailers that can offer experiences you can’t get online in stores will thrive. Where you used to see food and beverage operators clustering around retailers, now we are starting to see the situation in reverse. People on a leisure trip are often more relaxed so that discretionary spend is easier.
The reports of positive Christmas trading from many retailers can also be a little misleading. Much of this is down to the two extra days of trading before Christmas, which has somewhat skewed the figures year-on-year.
Of course the next big upheaval will come from whatever happens with Brexit in March – it was announced today that inflation has risen once again, and so the next quarter is likely to be more challenging.
Diane Wehrle is marketing and insights director at retail performance insight company Springboard.