Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends and shopping behaviours. They cover:
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Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends and shopping behaviours. They cover:
#theproductivityexperts
Register for the Produtivity Forum 2024
Follow us on Twitter @Rethinkp
Connect to Simon on LinkedIn
Follow ReThink on LinkedIn
Welcome to the Productivity Podcast. Back to talk about football in October, november and to touch on excuse me, christmas is down. We'll see you at Rental Intelligence and Insights.
Speaker 2:Hi Simon. How are you Not very good for the sound?
Speaker 1:I am full of the Christmas cold, so everybody listening needs to excuse my bunged up sound, but yes, I have succumbed to the festive cold.
Speaker 2:I managed to escape that one Christmas present.
Speaker 1:Yeah, you don't want it. It wasn't particularly nice. It was free, but not particularly nice. Not particularly nice Anyway. So it kind of exciting times. We've not got all the data for Christmas, clearly, because at the time we're recording we're in that no-man's-lam between Christmas and New Year, not sure what date it is, what date it is, what time of day it is. But we'll kind of touch on the lead-up. But let's let you wind slightly to November, which was Black Friday, if I recall.
Speaker 2:Yep, november included Black Friday, which was actually much more muted than hoped for Not surprising, given the economic challenges a lot of households have been facing. Footfall did go up. Inevitably then, of course, spend will have gone up from the week before, but people, I think, are pretty cautious approach around Black Friday. People still value Black Friday in terms of consumers, and there's also always a lot of debate about whether Black Friday offers good value and real discounts. But I think it's all about timing for consumers. Whilst it may not be the best discounts in the year, it's there, come at the right time, so it offers opportunities for consumers to spread their Christmas shopping and capture some discounts. So footfall did go up by about 8% from the week before, but not huge. Of course, some of that was online as well, but I think it probably saved November. The November was flat on the year before, so quite muted in November.
Speaker 1:And I think I've read quite a bit in the press as well around the discounts weren't necessarily as good as previous years. So there were lots of examples where actually, even though it looked like it was a discount, the price had been lower throughout the year. So again, I think the retailers have been more savvy with how they cut the price or deliver the message.
Speaker 2:Absolutely, and of course that's right and that's fitting, because retailers have to adjust to the economic situation, the level of stock they're carrying, what they're aiming for for Christmas, all those sorts of issues. But for consumers, of course they haven't got that level of awareness necessarily as to whether we're getting 15% now and we'd have got 20% in April discount. But of course they may not have had the budget in April to buy the Christmas present that they were buying in November. So if they get 15% discount now, that's great for them. So there's benefits both sides and it's now clearly a very fixed event in the retail calendar.
Speaker 2:It kick starts the Christmas trading period. Nothing really much happens in terms of Christmas trading before Black Friday, so that really signifies the start of Christmas trading period. It also dovetails with all the events and the lighting up of retail destinations really nicely. So consumers often use it as an opportunity to have their first Christmas shopping trip and go out on that Black Friday. And of course it's not a day, it's a week or even two weeks now. So they use that opportunity to start their Christmas shopping.
Speaker 1:So we kind of rolled out of November relatively flat, then slightly disappointing Black Friday into December, and I think even at the time of recording, december's weather has been quite turbulent, been a cold, a lot of wind, certainly a lot of rain. So how have we fared up to kind of, I suppose, just at the point before Christmas.
Speaker 2:Well, what happens after Black Friday?
Speaker 2:Black Friday creates this dumbbell effect in terms of shopper behavior. So we see a big surge in the last week of November and then of the subsequent two weeks we tend to see a bit of a lull where shoppers ease off and you don't get that uplifting activity. Normal life resumes until very close to Christmas and, of course, christmas this year fell on a Monday, which meant there was an entire trading week beforehand for shoppers to make the most of. So that made a surge in the last week. So that's what we tend to get now in terms of the shape of Christmas shopping, and so that's exactly what happened this year. We had that late surge the week before. It hasn't been amazing over the last week or so, but I think the week leading up to Christmas it was about 15% up, so it's not huge, but it was definitely a Christmas of caution. But I think, more importantly, the underlying effects on what people are buying, how they're behaving, those sorts of things so those are really quite telling in terms of what they're doing in terms of Christmas.
Speaker 1:So have you seen any trends in terms of categories that are performing above expectation or where we've pulled back from our spend?
Speaker 2:Well, it's quite interesting because we work with Arendal. We work with a company called AL Marketing, who are retail and destination events management company and create events and promotional campaigns for shopping centres, and we carried out a survey with AL Marketing literally in the run up to Christmas, trying to get that really current view from shoppers of what they're buying for Christmas and that Christmas of caution Monika really comes through in the results. So what we found was that 40% of shoppers said they were going to buy less tech than they did last year, which of course, tech products are high value and I mean it's probably anticipated by the fact that there hasn't been a great new release of any tech this year, but clearly that means that they are not spending as much in terms of those products. And food spending this year is higher. They're saying they're spending more on food but of course they would be because inflation is higher, but 45% were saying they're buying more food items this year.
Speaker 2:But also I think that demonstrates the priority of consumers around Christmas lunch and Christmas dining and that dovetails with another result from the survey, which is they're saying that spending on entertaining at home is increasing.
Speaker 2:So they're saying they're spending more on entertaining at home, so they're staying home, close to home, 45% of shoppers are spending the same amount and 30% spending more at home, while spending on eating out is reduced 31% said they were spending less on eating out. So this cautionary, modest behaviour pattern is coming through and the other result we saw, which was beauty, health and beauty. We've seen throughout the year that health and beauty has been pretty resilient, which is fantastic for those retailers and close to Christmas, 47% of shoppers said they were buying the same amount of beauty products as last year and 27% said they were buying more, and that can almost be regarded as a functional purchase. You know there's that talk about the lipstick effect of a recession, which is the demand for an affordable treat, but you know, much of beauty products is about replenishing those everyday items, perhaps high value items, that so many of us like to use.
Speaker 1:Yeah, and it's interesting, isn't it? Because if you know what you like, then it's an easy present. Clearly, people give up other things rather than their favourite makeup or their favourite fragrance, so plays into all that piece. I mean the tech thing is interesting as well. I think you made the point. There's not really been any innovative tech or new tech. You know there's no new Xbox, playstation, apple device other than the latest iPhone, which probably flattens the market as well.
Speaker 2:Absolutely, yeah, absolutely. So it's not surprising that people are buying less tech than last year, if there's nothing actually to entice them to do so. And, you know, with beauty, of course, they're all dressed up in lovely gift boxes, so you get what you want everywhere anyway, but you get a little bit more at Christmas, which is quite nice. They look pretty. So health and beauty really has been probably the winner.
Speaker 1:Good. Maybe some retailers will be pleased with that in terms of what the winners and losers were, and maybe some others disappointed. We've, then, got the kind of piece we're in at the moment, which is Boxing Day, which is typically when the shops are open for sales I think a lot more closed this year, certainly some of the supermarkets were and again a lot more of the sales start, don't they really? As shops close on Christmas Eve and you can't get the stuff delivered for Christmas Day. So that whole world of Boxing Day sales is morphing. Weather's not been great, so how do you see this period between Christmas and New Year panning out this year?
Speaker 2:Yes, boxing Day. I mean, what we've seen over the last decade or so is this decline in the influence of Boxing Day as a retail shopping day. I mean, I remember when I was young and I don't you're younger than me at Simon, but I remember the queues outside department stores at sort of six o'clock in the morning.
Speaker 2:Well, that doesn't happen really anymore. Last, we get a queue outside of Selfridges in London, but really we don't get those queues anymore and that's because you know we can buy online on Christmas Eve, christmas Day, you know, boxing Day morning Don't need to go and queue anymore. So if you're going to go out on Boxing Day, it's going to be more of a leisure day. So we've seen in most years declines in footfall on Boxing Day. This year we actually saw an uplift, but we're it's in the sort of recovery from COVID. So during 2021 we saw a huge sorry. 2021 we saw a huge decline. 2021 to 2022, we saw some parts sort of bounce back.
Speaker 2:And we've seen an increase of footfall over on Boxing Day this year, 4% from last year, which seems quite a lot. But actually it's more of a recovery from still a recovery from pre-pandemic levels and we're sitting below pandemic pre-pandemic levels still. But what was interesting about Boxing Day is this whole leisure thing because we saw footfall. The results came out from MRI that said that footfall up to 12 PM was actually just about 1% up by 3%. By 3 o'clock it was 2.3% up, but the whole day it was 4% up. Well, you can see that the weight of the footfall and weight of activity is later in the day, particularly post 3 PM, and that's got to be about eating out and socialising rather than just shopping.
Speaker 2:So that's the leisure day. So the next three days are normally the big key shopping days 27, 28, 29. But of course we've got this storm garret which has wrecked havoc across the UK, in the impound, at least portions of the UK, I mean. Where I live just north of London it's windy and rainy but it's not too bad. I know that from where you are, simon. Upwards it's pretty horrendous really.
Speaker 1:Yeah, it's been really windy and then the reports on the tally yesterday in Scotland with the snow and people having no electricity, so I think the further it would be going, the worse it's been.
Speaker 2:Yeah, absolutely. And in Manchester they had a mini-tornado, understand, yesterday, so we should have taken out power. So that's going to affect shopping activity around Manchester area. So it's going to be a little bit more muted and of course people are generally fairly cautious. They may be going out and enjoying what's in the stores, but we shall see whether that translates into spend when the NOS results come out.
Speaker 1:Yeah, so interesting times. And then there's the air of uncertainty. I suppose we head into 2024, there's different reports of we're going into recession, we're not. Interest rates are going up, interest rates are coming down. So the economy's still got that level of uncertainty that we've kind of tracked through from the summer.
Speaker 2:Absolutely. I mean things are moving in the right direction. Clearly, you know inflation has come way down from its peak, but it's still higher than, obviously, the 2% target. And a lot of inflation is still city and food, which, of course you know hits households proportionally harder for those who are less. So an interest rate is what's not going up? They haven't come down yet and we don't know whether they will, and there's lots to talk about us.
Speaker 2:You know the UK going to a mild recession, so it's making people feel a little bit nervous. And, of course, the job market isn't so buoyant now as it was last year. So people are tend to be hanging on to jobs they've got rather than starting to look around for the new roles. So that all leads into less shopping really, and you know shopping's an easy thing to pull back on. You know there's no, there's no penalty for not shopping, whereas a lot of contracts and streaming services and other things that we have in our household budgets, if you, if you cut them early, you end up paying a penalty. You don't have to pay a penalty if you don't shop. So people will just rail back on this discretionary interests and discretionary stand and wait and see.
Speaker 1:So fingers crossed, then, as we head into 2024, that you know, those things that are in our favour start to work for us. I think we've got in the next episode we'll cover that piece and get the actual start from December, but I think, in summary, it's been probably a more turbulent year than than we all expected, hasn't it? In terms of all those economic things that have hit us. And from a full point of view do I watch your kind of summary?
Speaker 2:Well, it's going to be fairly muted in January. Of course it always is. You know, december to January we'll see November to December we'll see an uplift, undoubtedly. We're still sitting way below pre pandemic levels, with 20% below pre pandemic levels, you know, rather than it's not really the growth of online that's doing that, it's the fact that that would have happened anyway.
Speaker 2:So there is an element of online. Yes, of course there is, because we make fewer trips through ours than every year. You know, as retailers become more proficient in offering us this wonderful online world, we browse less. But generally it's because we've changed our shopping habits over that period. You know, many of us don't go out as much during the week because we work at home, so we're not in those towns and cities, we're not close to those shopping centres, so we're not shopping as much. So football will be muted in, possibly more muted than we'd hoped in December, despite the success of Boxing Day, which is only one day at a quarter. And, as you said, the weather doesn't help. I mean, we have bad weather every year, but when you have a lot of rain, a lot of wind, it does deter people from going out shopping.
Speaker 1:Well, fingers crossed. And, as ever, the data doesn't lie, so we'll see what it brings in for the next one. Thanks, dye, and we'll catch up soon.
Speaker 2:Lovely Thanks, Simon. Hope you feel better.
Speaker 1:Cheers.