Boxing Day 2017, a poor cure for ailing high street retailers

The UK’s sales season kicked off in lukewarm mode, with footfall in shops down by 5.2 percent year-on-year. Consumers’ income squeeze doesn’t help their already battered confidence in the future of the country’s economy, what translated in more people browsing than actually shopping.

Retail intelligence provider Springboard revealed Wednesday that footfall in shops was down 5.2 percent by Tuesday afternoon compared to last year. “Retailers have been discounting since before Black Friday and have had sales ever since,” said Diane Wehrle, marketing and insights director of Springboard. “It rather takes the shine off the Boxing Day sales”. “What we have seen in the last couple of years is a structural shift in the Christmas trading period,” she further explained in an interview with the BBC. “The hotspots for Christmas trading around Boxing Day and New Year’s Day are dissipating."

Boxing Day had got off to a “slower start than usual” in London, with footfall down compared to last year, further confirmed the New West End Company, which represents the shopping district around Oxford Street, Bond Street, and Regents Street.

The poor trading statement didn’t surprise anyone, taking into account that inflation hit 3.1 percent in November, marking the highest rate in more than five years. “There’s massive uncertainty," reassured independent retail analyst Richard Hyman. Quoted by ‘The Guardian’, Hyman highlighted that "You’ve got inflation coming through, you’ve got earnings lagging to where they were years ago. This makes life difficult. Why would people be optimistic?”

The brighter picture: online and international shoppers on the rise

Despite the dire situation on the high street, where the footfall declines were comparable to the drop-off during the financial crisis nine years ago, Springsboard’s director of insights highlighted how online sales were making up some of the difference. Data collated by ‘The Independent’ shows that in the first four weeks of December, the volume of consumer transactions online, whether for delivery of click and collect, was up 28.4 percent over last year.

In the same vein, Amazon said on Tuesday that it was enjoying its biggest festive season to date with “customers all around the world shopping at record levels”.

But not everything is rosy, warned Wehrle; many retailers would face a difficult Christmas season even with such strong online sales growth because Internet purchases still only account for a little over a fifth of all retail sales. “I would guess sales are likely to drop this year,” she said.

Meanwhile, shops in London’s West End have become increasingly reliant on overseas visitors in the face of more cautious domestic consumers. Tourists accounted for one-third of spending this Boxing Day, according to the local business association.

“Footfall is down in single digits but spend is up,” Jace Tyrrell, New West End’s chief executive, said. “Chinese shoppers in particular have helped boost till receipts to 20 million pounds by lunchtime today, with luxury purchases such as handbags and winter fashion in high demand,” he added.

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