Plan B – Springboard’s predictions for the impact on retail stores and destinations in the run up to Christmas

Dec 9, 2021

Croydon, UK
Diane Wehrle, Springboard’s Marketing and Insights Director provides predictions on how Plan B will impact retail stores and destinations in the run up to Christmas.

The guidance issued last night by the government for people to work at home if possible from Monday will inevitably impact retail – but the question that I’m sure everyone is now pondering is the degree of impact this is likely to have on retail stores and destinations.

With our data on footfall in retail destinations collected by hour 24/7 from over 3,000 individual counting points across the U.K. in the three key destination types (high streets, shopping centres and retail parks)  Springboard is in a unique position of being able to offer some predictions as to what may occur over the forthcoming weeks.

Inevitably the guidance will impact activity foremost in those locations with the largest amount of office based workers, which are our large city centres, in particular Central London which is already labouring under the pressure of a reduced office population and a lack of international tourism that is so critical in the run up to Christmas.

In Central London and city centres outside of the capital footfall is currently -20% below the 2019 level; with the gap in footfall from 2019 in Central London narrowing from -58% in May, and from -34% in large cities outside of the capital. Unfortunately we are likely to see a sudden and severe widening of the gap once again next week. But it won’t only be daytime footfall from office workers that declines, but it will also mean that leisure based footfall that is so prevalent in the run up to Christmas will also lessen, as the nervousness of visitors means that trips to cities are deferred or cancelled altogether. In the light of this, we predict that the gap in footfall from 2019 is likely to widen once again over the next few weeks to -50% in Central London and to -30% in cities outside of the capital.

Croydon, UK
At the same time however, from our knowledge of previous periods of Covid restrictions we know that enforced home working and increased nervousness around Covid means a proportion of this footfall will be diverted elsewhere, predominantly to smaller high streets that are more local to shoppers’ homes and are less congested, and to retail parks, many of which have a wide range of high street retail stores that are large and spacious combined with open air parking that is free of charge and the majority also include large foodstores that are so key in the run up to Christmas. Some shoppers are also likely to transfer their city based trips to large shopping centres which deliver a Christmas experience but where the stores are large and the malls are wide, enabling them to socially distance more easily.

This means, that whilst footfall in these destinations will still weaken, the drops they experience won’t be as severe as that in large city centres; in outer London – where many Central London commuters reside – footfall is likely to shift from its current level of -10% below 2019 to -15%, in market towns footfall will shift to -19% below 2019 from its current level of -16% and in shopping centres to -28% from its current level of -22%. In retail parks – where footfall is just -4% below the 2019 level – we anticipate that the drop in shopper activity in city centres could mean that footfall actually strengthens to -2% below the 2019 level.

And of course there is the diversion to online which we know is the first stop for many, and has significantly accelerated since the start of Covid. The % of non-food spending that is online currently stands at 22% (10% for food spending) and in December last year when restrictions were also in place (albeit more severe that those under the current Plan B) online spending on non-food stood at 30% (still 10% for non-food spending). In the light of this we therefore fully expect to see a sudden rise in online non-food spending once again, to circa 29%.

So where does this leave our stores and destinations during the final stages of the most critical trading period of the year? Well, this clearly represents yet another hammer blow to an industry that is still trying to recover from a huge loss of trade in 2020. Whilst many retailers benefited from a huge uplift in their online sales last year, for the vast majority this was simply not enough to make up for the loss of store sales; after all, in normal trading conditions pre Covid in 2019 80% of retail sales were store based. Perhaps the saving grace for many will have been the awareness and concern of many shoppers around the lack of supply of products, which will have encouraged them to purchase their Christmas gifts earlier this year.