The removal of the remaining coronavirus restrictions in England is expected to have an immediate impact on consumer footfall and spending.

Northumberland high street

Consumer belief in the UK economy increased 23 percentage points in Q2

UK footfall is expected to increase 19.7% from the previous week on July 19 as requirements around face coverings and social distancing are lifted across the four nations.

According to Springboard, this increase in consumer footfall will be particularly evident on the first weekend with anticipated rises of 32.2% and 39.5% on July 23 and 24 respectively.

High streets will see visitor numbers rise by a quarter as more customers will be permitted entry into restaurants, coffee shops and pubs. A similar effect will be noted in shopping centers with footfall expected to increase by 18%, while retail parks are forecast to see a rise of 10%. 

The footfall forecast comes amid calls from retailers for the continued wearing of masks in stores.

Overall, footfall will still be down 20% compared to levels recorded in 2019. However, consumer confidence has already returned to levels experienced two years ago, according to the latest Deloitte consumer tracker.

Consumer confidence grows

UK consumer confidence has risen by two percentage points from the previous quarter, now standing at -9.  This is the highest level recorded since quarter four of 2019 and up nine percentage points from quarter two 2020.

Consumer belief in the UK economy increased with growth in sentiment around the economy rising 23 percentage points in the second quarter of 2021. This positivity was also reflected in UK businesses, with optimism among chief finance officers near its highest level in 13 years, according to a recent Deloitte CFO survey. 

Seventy-nine percent of UK consumers also said they had saved money during the pandemic, with discretionary spending rising 19 percentage points in the second quarter of 2021. 

Deloitte head of consumer research Ben Perkins said: “Much of the hope of a sustained recovery in the consumer and retail sector rests on the near-record levels of savings consumers have accumulated during the pandemic.”

Despite this surge in consumer confidence, challenges remain for businesses. “While pent-up demand has been a key driver of discretionary spending this quarter, the issue might be on the supply side – the pandemic has exposed structural flows and capacity issues. Leading consumer businesses are already rethinking their business models and adapting their supply chains, but many others are struggling to adapt,” Perkins said.

Leisure spending among UK consumers also increased in every category in Q2 apart from in-home leisure, illustrating the impact that society’s reopening is having on spending habits. 

Deloitte hospitality and leisure partner Simon Oaten said: “The lifting of restrictions, improving weather and the continuation of the summer of sport, could see an acceleration of leisure sector spending during the next few months. The challenge for business leaders, however, will be how to juggle scarce staffing resource in order to meet this increased demand.”

The end of the furlough scheme in September is a further factor that may interrupt future consumer engagement. Oaten said: “The question remains as to whether the boost in confidence and spending will be enough to sustain the leisure sector when government support is removed later in the year.”