Footfall has declined at its sharpest rate since 2014, but what are the significant factors at play and what should retailers expect next?

Footfall in June fell 2.8% year-on-year. Of the three main shopping destinations, the high street suffered the worst decline – dropping 3.7%. Shopping centres also recorded a 2.3% decline and retail park numbers fell 1% too.

This is the first time since 2013 that a drop in shopper numbers was recorded across all shopping destinations, and it appears there are new and significant factors at play.

I don’t care what the weatherman says

The classic excuse for a drop in shopper numbers is, of course, the weather. And it has been attributed as a contributor to June’s poor turnout.

However, Springboard marketing and insights director Diane Wehrle does not think, on this occasion, that the rainy weather can shoulder all the blame. While she acknowledges “the cooler, more rainy weather than last year” will have played its part, she doubts it will – on its own – have accounted for the 5% drop across UK destinations in the seven days after the EU referendum.

Instead, she believes June’s disappointing performance was shaped by a “political and economic storm against a backdrop of rain downpours and generally inclement weather throughout the whole month”.

The Brexit-effect

The political and economic storm that Wehrle refers to is the spiralling of events post-EU referendum. But to what extent is Brexit to blame?

While shopper numbers only slipped 0.4% in the first week of June, they deteriorated to 4.6% during the week of the referendum. This was followed by a 3.4% drop the week after, “as consumer confidence was hit, despite retailers discounting throughout the period in early season sales,” Wehrle says.

These figures suggest that the impact was significant.

It is also worth noting that out-of-town retail parks experienced their first decline in June since December 2013.

Wehrle says the decline here could be, in part, because shoppers’ attention was diverted, in the immediate aftermath of the vote, and that some people might have delayed making big-ticket purchases, even if they continued to make smaller discretionary spends on the high street.

However, there are a blend of factors at play, with the cooler weather this June preventing people from buying garden furniture, for example, and the inevitable slowing of growth in retail parks, she adds.

Wehrle concludes that ”Brexit has absolutely had a role to play” in June’s poor footfall performance, but agrees that it is difficult to say – in these “uncharted waters” – to what extent. 

As Wehrle says, “we’re akin to a phoney war at the moment. Article 50 has not yet been invoked and dreadful events in the news in the last couple of weeks have taken the attention away from the referendum a little.”

The degree to which Brexit will prevent consumers from visiting shops in the long term is yet to be fully realised.

The limited impact of sporting events

While British Retail Consortium chief executive Helen Dickinson says the plethora of sporting events in June kept shoppers away, Wehrle is less certain that this is the case.

Dickinson says: “June has seen many distractions, from Euro 2016 to Wimbledon, so heading out to the shops seems to have slipped down the priority list for many”.

But Wehrle points out that this is nothing new and cannot therefore account for the drop. “Wimbledon happens every year, and with the tournaments’ finals being on a Sunday in June, the impact on footfall is minimised,” she says. 

“It’s true that many people will have stayed home during June to watch both the football and the tennis, but the events will have benefited some retailers, so the impact is balanced out.”

Looking ahead, what can retailers expect to face in the coming months?

Wehrle does not anticipate that July will bring a “startling” recovery.

“I suspect we will bob along. Footfall took a hit around the referendum so there may be a bit of improvement in July, but this depends on how people start to feel about shopping as time goes on,” she says.

Wehrle predicts that the schools breaking up later this month could have a positive impact on footfall in July, “as teenagers pour into high streets”.

Likewise, with the sun finally rearing its head, the weather is likely to play a bigger role in July’s footfall figures. But, as Wehrle explains, it depends how long this lasts for. “If the hot weather lasts, it will have a positive impact on fashion sales of summer clothes. If it dies away, it won’t have a huge impact over the month of July,” she says.

Following last week’s shock attack in Nice, the threat of terrorism may impact July’s footfall figures, as the recurrence of these events can lead to footfall volatility, particularly in busy tourist locations and large, popular shopping venues.

Wehrle says: “Whenever there is a significant terrorist event, there tends to be an immediate hit on footfall in destinations that are perceived to be a target.

“However, this often rights itself and balances out because people tend to just delay their shopping trips for a few days.”

Sporting events are not likely to factor in July’s figures, because the Olympics do not kick off until August. But when they do, Wehrle explains, they are likely to bring both positive and negative effects, depending on the scheduling of the main events and the time difference.

She says: “If we are watching events at night, footfall shouldn’t take too much of a hit. During the last Olympics, footfall fell on Super Saturday because lots of people stayed at home to watch [during the day].”

And how can retailers pro-actively move forward?

Although there is a level of consumer uncertainty, the EU referendum will not have changed retailers’ desire to delight their shoppers.

In fact if anything, retailers will be more motivated than ever to ensure they offer an exceptional experience to pull shoppers in during these uncertain times.

Dickinson says: “Retailers know that providing a great in-store experience is key to driving up footfall. In the coming months we all must redouble our efforts to remind customers that now is a great time to get out into their local communities.”