Cold weather and a continued squeeze on Britons’ finance has seen footfall at UK shops drop to levels not seen since the recession, new data show.
Footfall dropped by 3.3 per cent in April, following on from a 6 per cent decline in March, which resulted in an ‘unprecedented’ drop of 4.8 per cent over the two months, according to figures by the British Retail Consortium.
‘Not since the depths of recession in 2009, has footfall over March and April declined to such a degree, and even then the drop was less severe at -3.8 per cent,’ said Diane Wehrle, Springboard marketing and insights director.
‘Unprecedented’: Store footfall fell sharply in March and April
The BRC also found that nearly one in 10 shops in town centres was vacant in April, as the vacancy rate rose to 9.2 per cent from 8.9 per cent at the start of the year.
The gloomy data comes alongside a separate survey that shows consumer spending has continued to decline despite a recent pick-up in wages, with high street retailers suffering the most.
Consumer spending fell by 2 per cent overall last month – adjusted for inflation and seasonal effects – marking the 11th consecutive month of declines, according to the latest consumer spending index by Visa.
UK households cut back especially on big items such as furniture and electrical appliances as well as recreational activities, Visa said.
Meanwhile, the BRC report showed that all regions saw an increase in the vacancy rate, except for Greater London, where the rate dropped to 3.6 per cent from 5.6 per cent in January.
BRC chief executive Helen Dickinson said a wet start to the month of April had added to the long-term downward trend in footfall, as shoppers increasingly prefer to do buy things online.
‘Belt-tightening mode’: Consumer spending in 2018 is on track for its worst performance since 2012, according to the report
‘That shift in the way we shop, coupled with a highly challenging business environment, is having a significant impact on the nation’s high streets: in April nearly 1 in 10 shops in town centres was vacant,’ she said.
‘While these figures highlight the difficulties faced by retailers, they also point to the evolution of the industry.’
It comes as face-to-face spending on the high street saw the biggest annual drop in six years, falling by 5.4 per cent last month – faster than a 2.9 per cent drop seen in March, when bad weather was partly blamed for the fall, according to Visa’s report.
Online spending also dipped, by 0.1 per cent – a gentler decline than the 1.1 per cent fall seen in March.
Visa said the index showed clearly that despite rising wages, Britons remained in a ‘belt-tightening mode’.
‘With inflation beginning to fall and wages growing faster than expected in recent months, it would have been easy to assume we might be over the worst of the consumer squeeze,’ said Mark Antipof, chief commercial officer at Visa.
‘Yet there has been no corresponding improvement in spending, with April’s 2 per cent decline a simple repeat of what we witnessed in March.’
Steeper declines: Spending on the high street saw the biggest annual drop in six years
He added: ‘Low confidence levels amongst shoppers and the gloomy outlook for the UK economy are likely to have contributed to this continued caution.’
Visa said April’s numbers suggested that consumer spending in 2018 was on track for its worst performance since 2012.
That’s despite the Bank of England saying last week that stronger wage growth and falling inflation should start to support consumer spending in the coming months.
Looking at different types of spending, expenditure on household goods was down 6.1 per cent year-on-year, followed closely by recreation and culture, which fell by 5.6 per cent.
Spending on food and drink fell at the quickest pace since September 2013 – by 4.6 per cent – after an Easter-related boost in March.
Clothing and footwear retailers saw the steepest decline in spend for six months at 3.5 per cent.
Store closures: Carpetright recently announced it will close 81 stores
The figures come amid recent reports of struggling retailers and store closures from the likes of Carpetright, New Look and Poundworld.
Annabel Fiddes, principal economist at IHS Markit, which compiles the report, said the high street remained ‘a key source of weakness’.
‘At the same time, UK economic growth has slowed, and the recent revival in wage growth has so far failed to translate into improved expenditure trends, adding to fears that spending will remain subdued in the coming months,’ she added.
Higher spending was registered for health and education, up by 5 per cent annually, and hotels, restaurants and bars, though growth in the latter softened to the weakest for eight months, with a 2.9 per cent annual increase.
The index uses spending on Visa cards as a base and adjusts the figures to reflect all consumer spending, not just that on cards.