Last year will undoubtedly go down in history as turbulent – politically, socially and economically – both at home and abroad.

The business of retail was no exception to the impacts, particularly as consumer confidence and spend is often one of the first things to be affected by adverse events.

As 2017 moves along and we draw closer to the triggering of Article 50 (preceded by the budget statement) it will be interesting to see how retailers fare, particularly given the footfall results for January.

“This drop across bricks and mortar destinations in the UK may be a sign of tougher times to come in 2017”

Footfall in January was down 1.3% on the previous year; the steepest drop in footfall since the 2.8% fall in June 2016, and lower than the three month average of 0.8%.

This drop across bricks and mortar destinations in the UK may be a sign of tougher times to come in 2017.

The fact this is the steepest decline we’ve seen since June 2016 when footfall was impacted before and after the EU referendum, is significant.

However, the results for January are consistent with the longer term trends we’ve been seeing in footfall, with shopping centres consistently faring worse than high streets and retail parks.

Importantly, retail footfall is correlating closely with retail sales overall – will the sales results published so far showing a worse performance in January 2017 than January 2016.

Despite the decrease in recorded UK footfall, conversely the UK vacancy rate has improved from 9.5% in October to 9.4% in January.

A change in consumer demand

It’s likely that that the declining vacancy rate reflects the wider trends being seen on the high street and other retail destinations, emphasising a move in consumer spend from the purchase of physical items to experiences.

It seems that today consumers perceive their leisure time with friends and family as having a higher value.

This trend also goes some way to explain the disparity in footfall between the high street and shopping centres, where shopping centres are consistently showing more disappointing results in terms of footfall.

The high street is more resistant to this change in spending patterns than shopping centres due in part to its flexibility to introduce new tenants and increase the diversity of its offer more quickly.

“It seems that today consumers perceive their leisure time with friends and family as having a higher value”

Comparatively, shopping centres are subject to a longer chain of command, meaning that introducing new tenants like bars or restaurants to this environment is a much longer process.

Furthermore, the environment offered by shopping centres today is less attractive to consumers than the high street.

The development boom of the 1980s and 1990s meant that many of today’s shopping centres are dated in design and configuration, and built in a style that is not consistent with current consumer demands for flexible open trading space that interlinks seamlessly into town centres.

Operating within a closed environment, many are in need of investment to improve their aesthetic appearance and experiential offering that deters shoppers seeking a holistic visitor experience.

  • Diane Wehrle is Springboard’s insights director