By Mark Fairlie.
More evidence that the High Street is struggling was released today in a joint survey carried out by the Retail Consortium and analysis firm Springboard. The survey discovered that footfall in shopping centres, retail parks, and High Streets fell by 3.2% year on year in November to its lowest level since the deep recession of 2008.
It expects footfall in December to fall further (by 4.2%) at a time when business confidence among retailers was at a two-year low.
The British Retail Consortium (BRC) believes that the figures provide “indisputable evidence” that Black Friday does not bring any measurable benefit to High Street stores, according to Marketing Week.
Speaking to Retail Gazette, the Consortium’s chief executive said that “the Black Friday effect” actually drove people to make more purchases online while noting that the Black Friday period seemed to be getting longer and longer each year. She believes that the deep discounting tactic used by online retailers “negatively (impacted) footfall across a longer period over the month”.
Quoted in DrapersOnline, Diane Wehrle, Springboard’s marketing and insights director, said that,
“in the week of Black Friday itself, footfall declined by 5.5%, more than in any week of the month. And the fact that like-for-like spend was down by 0.5% in November, alongside the lowest rate of growth in non-food online sales, are further indicators that the gleam of Black Friday is diminishing.”
Ms Wehrle was reported by the BBC as saying that the November footfall figures were the worst since the recession and “we’re not actually in recession”, warning that more High Street chains were vulnerable to collapse in January.
She expressed concern in the Daily Mail about the “huge amount of discounting” through the year which had seriously eroded retailer profit margins. “Retailers have opened Pandora’s box and it is now going to be very difficult to close it again”.
2018 has been a bleak year for British retailers, with several large retailers entering administration and using the administration process to close unprofitable stores. The paper’s “store closure tracker” following the fortunes of major retailers reports the closure (or earmarking for closure) of 1,267 shops with a potential loss of jobs measuring 25,519.
According to BBC News, there a number of factors contributing to the sharp drop in the number of chain and independent retailers in the UK.
The internet is the main factor in the mind of Paul Martin, head of UK retail at KPMG. Mr Martin states that the overall retail market is not growing and, year on year, the internet is taking more of the business – currently around 20% of retail spending.
Other reasons cited by the BBC include:
- a squeeze on UK wages,
- retailers failing to adapt to changing tastes,
- rising overheads, particularly business rates and wage rises,
- too many shops which are underperforming, and
- a high level of debt held by retailers which need servicing.