ReThink Productivity Podcast
In this exciting podcast, Simon Hedaux from ReThink Productivity shares his insights and strategies for improving productivity and efficiency in the retail and hospitality industries. With the help of clients, partners, and the ReThink team, Simon covers everything from measuring and tracking productivity to developing and implementing effective strategies.
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- How to measure and track productivity
- Proven strategies for improving efficiency and reducing waste
- How to create a culture of productivity and innovation
- Tips for motivating and engaging your team
- Real-world examples of how other businesses have used ReThink Productivity to achieve success
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ReThink Productivity Podcast
Footfall Insights August 2024
Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends and shopping behaviours. They cover:
- Footfall trends from June to July 2024
- The recent riots
- Outlook for the next few months
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Welcome to the Productivity Podcast Today, dan Wellreturn, ceo at Rendall Intelligent Insights, for our monthly chat about consumer behaviour and footfall, hi Di.
Speaker 2:Hi Simon, how are you?
Speaker 1:Good, thank you. So we are rapidly moving through the year. We're now looking at June to July. We are Summer, or so some say. I've not seen much of the big yellow thing in the sky, but alleged, allegedly, we're in uh, peak summer. Um, last month, the last month we discussed, uh may to june, it was kind of there was no major shift, was? It is relatively static. How are we looking june to july?
Speaker 2:well, it's not looking particularly fantastic, I have have to say. Footfall has worsened over the month. So in July footfall dropped by 3.3% from July last year, whereas in June it was 2.3% down. So that big variance is widening with a drop in high street footfall, retail park footfall, retail park footfall, shopping centre footfall. So that's numbers into stores in those destination types. So fewer people are going out to shop. And then that has sort of ricocheted through into spending and Beauclair's data on spending in High Street shows a drop of 9.3% from July last year. So quite a significant drop. But also drops in every one of the 10 sectors they look at. So through from fashion to entertainment, big drop in entertainment spend, even a drop in health and beauty, and health and beauty were really quite strong in other months. So general weakening really really of consumer behaviour and trading.
Speaker 1:That feels big. I mean, my naivety says it's because everybody's on holiday, but you'll tell me it's light for light, won't you?
Speaker 2:I will, unfortunately I will. Yes, it's July this year versus July last year, so people were on holiday in July last year too, but I think over this year I think what's happened is that people have been forced to endure higher prices and that's drained their household budgets. So, whilst you know, people aren't willing to sacrifice their holiday because holidays have become more important in people's diaries since Covid, really. They are then reining back on other spending. So they're pulling back on all sorts of spending in different areas. So if you've got the budget to go on holiday, you go on holiday, and if you haven't, you don't spend.
Speaker 1:Right, okay, so there's a prioritization of, of events or lifestyle choices coming through, then maybe, um, yeah, weather, does that have an impact?
Speaker 2:weather always has an impact, you know. It's one of the biggest factors in retail, isn't it, um? Do we ever get it right and is it ever perfect? No, um, and we've had poor summers before and we've always been moaning about them. But it, you know, it really impacts retail, as we know, and fashion spending, particularly because it is actually a very, very short season in the UK and so if we don't get good weather in June, july, a lot of people will make do. By the time good weather comes around in late July, august, people are saying, well, it's only a few weeks till back to school and you know the summer clothing goes away anyway, so I'll make do. So it does really impact particular sectors, like fashion, I mean. Some other sectors are a bit more resilient health and beauty, for example. Sales dropped by 4.8 percent in health and beauty in July that's been strong, that's been really strong, hasn't it in?
Speaker 2:previous conversation it has, and a lot of that spending will have been pre-holidays. So, for example, in may health and beauty spending was up 2.4 percent. June it was down by two percent. July it was down by 4.8 percent. So you can see where that is going. Fashion, um, it's had a bit of a torrid time the entire year. Likewise, it was down 4.2% in May, 6.8% in June and in July 11.9%. So you can see the impact of cooler weather. People just simply aren't replenishing their fashion wardrobes. I'm one of those. What is the point of having more clothes that I don't wear, and I'm sure I'm not unusual in that. So it's tough for retail out there at the moment really tough it's. You know retail's got to work hard to keep those consumers and keep the spending.
Speaker 1:Yeah, or you wait for the sales, don't you? Which we're starting to see now in early August. So whether there's an impact, it's like for like. I mean, there's some uncertainty in the world, isn't there? You clearly got all the the stuff in russia that's still going on tends to go in ebbs and flows in terms of quietings down and then comes back.
Speaker 1:You've got the stuff in america, so you've got the pending election in november, I think is it yep and that's, you know, taking its twists and turns, with biden stepping back and all the stuff there, and you know there's always a a bit of a circus around Donald Trump, whatever he's saying or doing, and that has a big impact on their economy and their economy has a big impact on world economy, clearly, and in this country, as we've had the change of government, some political unrest with the stuff that happened at the end of the period we're looking at in terms of the riots based on the events that unfortunately kind of transpired in Southport. So that won't do anything for anybody who's thinking about having a nice evening out in the local town or city or going out to spend some money, will it, with all that kind of stuff going on?
Speaker 2:absolutely not, and actually I I obtained some data from sensomatic on the impact of those, uh, that unrest in the towns and the regions where it happened and, um, it was quite a condensed period of time. I mean, hopefully we're now in middle of august and things seem to have settled down, albeit that the media just might have moved on to something else. But in that first week, you know, just after the awful Southport stabbings, we were seeing double digit drops in certain cities around the UK Birmingham 10 percent drop on one day. Cardiff 17.8 percent drop one day in footfall, and all of that just flows through into lower spending.
Speaker 2:I mean, as a consumer in living in one of these cities, you would think long and hard about whether you go shopping when there's this unrest. And you know, when you're seeing drops of magnitudes of anything between 10 and 20% in footfall, that's reflecting the fact that consumers are pulling back on trips, and quite rightly so. Why would you put yourself at risk when you don't have to? Hopefully that won't have too big an impact in august, but I have a feeling, because it's spread through into at least the first week, it's going to have a degree of impact, because that's a quarter of the month and some of those cities are big footfall drivers Liverpool, leeds, bristol, manchester, nottingham they're all important cities in terms of footfall overall and, of course, for retailers store networks they're important.
Speaker 1:So we're kind of more than halfway through the year. We're turning that corner. Some people like, as we head into the kind of the, the darker nights, the colder spells, the, the magic of christmas. Others it's maybe a who like the light and the sun that we've had much. It becomes the the more uh, torrid time of year. There doesn't seem to be many green shoots, based on what we've discussed today out there not hugely.
Speaker 2:Um, I would love to say that we're going to have a fabulous christmas. I have to say I think we're going to have a very cautious christmas. It's interesting because the first sort of sign you get around this is consumer confidence and whilst you know, in overall terms, gfk, who track consumer confidence, has seen a slight uptick, I mean it's still in negative territory. So in july they're what they call their index score was. I mean it's still in the negative territory. So in July what they call their index score was minus 13. So it's still negative, but it's better than June when it was minus 14, and certainly better than earlier in the year when it was minus 21.
Speaker 2:But, underlying that, there's a number of factors that come into play here and unfortunately people's views of their own personal financial situation has weakened. In may that, that single score for how people view their own personal budgets over the next 12 months was at seven, it's now a three. So people are feeling nervous. And this is despite the fact that now um wages are keeping, certainly keeping pace with inflation and certainly in some situations exceeding inflation. But people's household budgets have been drained by, you know, inflation over the past year and you know we saw the inflation results recently and inflation has gone up yet again, not I mean from 2% to 2.2%, but that is a tenth increase, and largely that has been due to a slower reduction in housing and household services costs than they thought, and so, and actually restaurants and hotels are still seeing quite high inflation around 5%. So I mean it's better than it was.
Speaker 2:June was 6.2%, so that's helped bring inflation down a little bit, but it's still very high. So I think we all know that when we go out to eat it's expensive now, so people are pulling back on that. So we're in a delicate, vulnerable position economically and in trading-wise. So the next month or so is going to be really telling as to where we'll end up at Christmas and, of course, for your lovely forum. In September I'm going to put my finger in the air and give our first indication of a forecast for Christmas trading. So it's going to be really interesting.
Speaker 1:Yeah, we've got the whole black friday cyber, cyber. I call it month now, because it used to be a day and then it was a week and now it just feels like it's um, it's strung out. So, yeah, maybe, as we discussed kind of last year, people go early um discount, discount, stuff that's hanging around and specials and are they pulling forward christmas? Are they cannibalizing their own christmas? You know, again, time will tell, but um, yeah, fingers crossed. It, like you say, it feels, it feels really delicate. It feels like those green shoots have, uh, have disappeared slightly or receded, but let's hope they, they come through in, uh, in vengeance in the next couple of months. Weather, weather makes a massive difference, doesn't it? So if we have a nice end to August and a relatively warm September, who knows if it's rainy, wet and windy, then we probably already know the answer, unfortunately.
Speaker 2:Unfortunately, yes, I mean, it's never been thus really in the UK We've always had weather and it's always impacted retail. But of course, when you've got two sides of the coin the weather and the you know the budgetary issues as well it's, it's, it's both on a negative pull absolutely brilliant.
Speaker 1:we'll pause there for this month, um, let's see where we end up in july to august, and then we'll be in Rethink Forum season, so not long now.
Speaker 2:Yeah, looking forward to it.
Speaker 1:Yeah, I think we're there with. All the registrations are done and everybody's booked in and yeah, you're first on again, so looking forward to it.
Speaker 2:Fantastic, I am too.
Speaker 1:Brilliant Thanks Di Catch you next month.
Speaker 2:Thanks, Simon.
