At first sight, July’s footfall results do not seem to give rise to huge concern.

Yes, the 1.1% drop in shopper numbers across retail destinations was a clear downward slide from a rise of 0.8% in June, but it was only the fourth time footfall has declined since January, while last year footfall dropped five times between January and July.

However, following on the heels of what seems to be a subtle strengthening in the performance of retail destinations over the first half of this year was a weakening of footfall in July that suggests greater challenges are afoot.

A telling decline in leisure

Over the last few months the growing importance of the leisure-based trip has become a key part of the narrative when talking about retail destinations, with an average 1.6% rise in footfall post 5pm.

July, however, appeared to herald the first sign that the rate of growth in activity post 5pm is slowing, with a 0.5% drop.

As with footfall generally, this slight decline is seemingly innocuous – or is it?

This was the first time since January that footfall has dropped across both retail trading hours and into the evening.

And in January the drop in footfall across all parts of the day was preceded by a sales performance over the second half of 2016 that was stronger than in the first six months of 2017.

This inevitably provided a greater buffer against some downturn.

Spending slowdown

Today’s less favourable trading landscape, however, adds to the theory that there are more concerning times ahead.

Not only might this be the first evidence of a tightening of purse strings on casual dining and leisure trips, but July’s results might well mark a sea change in consumers’ general willingness to spend.

Declining footfall demonstrates that the fall in non-food sales is due to a reduced number of shoppers, so retailers that maintain their in-store footfall are at a clear advantage.

However, the high level of consumer borrowing and an increase in the vacancy rate suggest that trading conditions could be reaching a tipping point into a period of restraint.

 

Diane Wehrle

Springboard marketing and insight director Diane Wehrle