The ongoing cost-of-living crisis is going to cause a “challenging run-up to Christmas” for retailers, with month-to-month footfall forecasted to decline in September, October and November, according to Springboard’s Christmas retail forecast.
Retail intelligence experts Springboard forecast that all UK households will “feel the pinch" due to economic challenges facing households because of the increase in energy and fuel prices. In the run-up to Christmas, they predict footfall across all UK retail destinations will decline on a month-to-month basis by 4.9 percent in September, by 2.5 percent in October and by 0.3 percent in November, eradicating gains made in 2022.
Commenting on the forecast, Diane Wehrle, insights director at Springboard, said in a statement: “We have been publishing footfall data since 2009 and in each year between 2009 and 2019 footfall dipped in September from August because of a drop in consumer demand following the end of the holiday season and the start of the school term. Covid heavily disrupted the two intervening years, but this year the drop in footfall will be more severe than in the same months pre-2019. This is due to consumers' fears over the impact of the rise in energy costs expected in October on their household budgets.
“The second key factor, once again identified through past trends, is that footfall in November dips marginally, mainly due to a drop-in high-street footfall which tends to occur due to the lure of shopping centres for consumers over the Black Friday trading period. In contrast to the forecast for September, the drop in footfall in November this year will be mitigated by shoppers being likely to use the discounts available over the Black Friday period to buy Christmas presents with the hope of outrunning inflation.”
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The forecast does add that they expect footfall to increase from November to December by 6 percent. While adding that December’s footfall will remain significantly below 2019 levels, as this holiday season will be “more subdued” than in previous years, as “consumers will be constrained in terms of available budget”.
Springboard is forecasting increases of 4.5 percent in high streets, 5 percent in retail parks, and 10 percent in shopping centres, from November to December, a time when many shoppers will be buying Christmas gifts.
Wehrle added: “Potential unemployment rates may also have increased, as some businesses fail due to the increase in energy costs, which will further depress demand in store. Footfall will rise in all three destination types from November to December, although the rise will be more subdued than in previous years.”
The impact of the drop in monthly footfall between September and November means that in October and November footfall will be lower than in the same months last year. Down 2.1 percent in October and a drop of 2.7 percent in November versus 2021. However, it adds that footfall will return to positive territory in December with a rise of 4.2 percent from 2021.