Footfall Insights October 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 August to September 2024
• Outlook for the next few months

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Transcript

Seasonal Shopping Trends and Consumer Confidence

Speaker 1 0:00

Welcome to the Productivity Podcast . Diane Whirl , founder at Rendall Intelligence and Insight , is back for our monthly chat around footfall and shopping trends Hi , di .

Speaker 2 0:09

Hi Simon , how are ?

Speaker 1 0:10

you doing .

Speaker 2 0:11

I'm good thanks . How about you ?

Speaker 1 0:12

Good , yeah , good , if I sound slightly drunk , I'm not . I've had a fill in this morning and I'm still a bit numb , so we'll persevere . But hopefully I'm not slurring my words .

Speaker 1 0:30

I can't hear anything . You sound fine to me . Good , that's fine , and my tooth feels better anyway , so all good . Um , so we're in august to september . We're kind of heading turn that corner into the . The leaves falling off the trees , the night's drawing in , I would say the weather getting worse . But it's not exactly anything previously this year to base it on . That's been good . So we had an okay conversation last time . I , I think , didn't we . From July to August it looked all right . It was looking relatively positive , heading in Lots of rumblings . Clearly Budget's on its way . As we record , I think in a couple of weeks' time Weather's not been great . We touch on mortgages and stuff in previous episodes and that next tranche of people . So what are you seeing since we talked last into that ? August to September people .

Speaker 2 1:06

So what , what are you seeing since we talked last into that ? August to september , right well , as a time of recording the uh , inflation and um sales from ons haven't yet come out , but um , we've got footfall into stores and we have domestic spend in high streets . So football in stores . First , um looked remarkably robust overall . Sensor matic and the BRC reported an increase of 3.3% annually in September , which seems brilliant . But when you look under the covers a little bit , the vast majority of that was driven through retail parks and shopping centres . That saw big uplifts , particularly retail parks over 7% increase in retail parks . High streets , conversely , saw an increase of just 0.9% in footfall going into stores in high streets . So very modest increase .

Speaker 2 1:51

And that really dovetails with the consumer confidence results that came out from GFK in September , which dipped pretty significantly from minus 13 . So they have an index score and their index score is minus 13 . So they have an index score and their index scores minus 13 in august to minus 20 in september . So people clearly feeling less confident . And looking at the data actually and so I'm wrapping that a bit um , it's very clear that what people are feeling is a lack of confidence around what's happening over the forthcoming 12 months . So they're talking about , you know , the the their confidence around the economic situation over the next year is what's really been sort of shaken a little bit .

Speaker 2 2:28

There have been little wobble in people's how they view their own personal finances , but it's mainly around what they feel is going to happen over the next year and there's been a lot of stuff around the government talking the economy down and I think that's really permeated through to consumer confidence and then also into spending , because beclair have um their results , which is spending in uk high streets dipped by six and a half percent annually in september versus a dip of 3.1 percent in august , with um a big hit on food and drink . So hospitality took a big hit in september um , and that will be for a variety of reasons partly because of consumer confidence and you know if you don't need to go out to eat or drink when you're feeling a bit vulnerable financially , you don't have to um but also the weather . You know we had a week of torrential rain during september . That really would have put a lot of people off going out to eat and drink if you don't have to go .

Speaker 1 3:23

I know it did me um so but there were drops across the board really , um in high street spend , so it was pretty , you know , a pretty disappointing month really so this could be , I suppose , a reflection of the general election to some degree , if you follow the pattern the euphoria , I suppose , in brackets , of changing colours of parties , and then the realism that actually not much changed and the challenges still remain the same , and like , say , maybe there's a degree of talking down the economy for what's to come at the next election budget and probably the one after that yeah , absolutely .

Speaker 2 4:01

I mean , I'm sure you know a lot of people . Do you know whether you start in a new job and you tell your new employer that actually things are a lot worse than you thought they were when you come in , so it makes your job a little bit easier . The government maybe adopted the same approach , you know ? Oh , it's much worse than we thought it was . This is awful , and I know I was listening to a variety of news programs , all of which were talking about the impact of talking the economy down . So clearly that was a factor and you know , if you listen to enough of those , it's going to impact how you feel about spending .

Speaker 2 4:28

I mean , house prices are continuing to increase , which is always a strong sign of people's confidence in their finances , because actually , you know , people move for new jobs . They move because they feel a little bit wealthy . They move because they feel confident they're not going to get made redundant . So that's still improving , which is a good sign . But people are putting their long-term financial assets and future first , really , and that's reflected in the fact that the savings ratio is 11% , whereas that's more than double where it was back a few years ago . People are clearly trying to recover their position from the last couple of years . Because inflation has been high , mortgages have increased enormously for a lot of people , so they're saving a lot more . So if you save a lot more , you just simply can't spend it .

Speaker 1 5:16

Yeah , and there's those other economic factors , isn't there ? There's a mass exodus of people moving out of being landlords because of some of the tax implications and we talked about said before in the previous podcast , I think it was is it November the next tranche of people come off their fixed rate deals ?

Speaker 2 5:31

Yeah , yeah , and then next spring as well . So there's , you know , it's happening in stages .

Speaker 1 5:37

But , on a positive note , we've got Halloween at the end of October , so from events point of view , we kind of hit this run now , don't we ? We've got Halloween , which , I have to say , most of the retail shops I've been in seems less of a thing this year .

Speaker 1 5:51

They've all got their suites or their costumes , but much , much less into it . Christmas early . We've got all the price establishments of your heroes and your celebrations , boxes and stuff that will be reduced down later . So we move from end of october clocks go um back , yeah , back is it back ?

Speaker 1 6:09

um , halloween , then into november , where we start to line up uh , black friday I'll call it week or month now and cyber monday . Then pretty much straight from there we're into Christmas and who knows when sales will land . If it's true to form , it's kind of Black Friday starts to sale , doesn't it in some degree , certainly in fashion world , if there's high stock ratios .

Speaker 2 6:32

Yeah , absolutely . I mean , you know , for all the data is showing that it's Black Friday that kicks off Christmas trading , and data from Beauclair shows it very clearly . When you look at week on week change in spend in the high street , nothing much happens before Black Friday and then you get this big surge in Black Friday week and then , following Black Friday , you get a constant week-on-week increase in spend all the way through to Christmas . And this year , of course , we've got a couple of extra trading days and they're the peak trading days . So we've got Christmas Day is Wednesday this year versus Monday last year . So we've got Super Saturday and then followed by Manic Monday . So the Monday is the 23rd and that's typically the busiest trading day , busier than Christmas Eve , and so we might well see some benefits to retailers to having a full trading week plus an additional day . So at least an additional day if people travel Christmas Eve . So that bodes well really , and also in terms of where I'm forecasting we sit versus last year , last year was a bit of a washout around Christmas .

Speaker 2 7:50

The year up to the fourth quarter last year was actually reasonably good . We were still coming out of COVID , we were seeing year-on-year increases in spend , and then quarter four . It all seemed to come together in this perfect storm of financial challenge and people just railed everything back and it was a really poor quarter and spend was down year-on-year in each of the three months . So just on the basis of that , I'm anticipating a small increase in spend this year in each of the three months in quarter four .

Speaker 1 8:21

So , fingers crossed that still comes to pass . Yeah , well , lots to play for . As ever , it's a it's a buyer's market , isn't it ? So the challenge is to the hospitality companies , the retailers , the online organizations to make the , the offers , attractive enough to tempt that valuable pound that we've saved or we're holding on to . Weather will play a big part again . I'm sure it's typically been wet , hasn't it ? And dark , which isn't maybe the best for high streets , better for those regional shopping centres and retail parks which has come through in your figures . Snow seems to be , in that really hard frost , almost a thing of the past , whether that's just the last couple of years and we'll see something different this year . But , yeah , I think , all to play for .

Speaker 1 9:03

I've seen some great shops when I've been out lately . Some great supermarkets set up , getting ready to set up fashion um general stores . So you know everybody's . You can feel that kind of energy and buzz starting to come . Let's get halloween out of the way and , um , yeah , all to play for . It's going to be tough , but I suppose when's it , when's it not ? Um absolutely .

Speaker 2 9:22

I mean , you know , christmas is always a challenging trading period and I've just worked with al marketing on their sort of golden quarter shopper survey and you know , interestingly , 81 percent of consumers are saying they're going to spend the same or more than they did last year , which is actually about 11 percent more than the people who said that the previous year . So you know things , shoppers aren't . It's not all shoppers that are feeling the pinch . You know .

Speaker 1 9:47

There are shoppers that are anticipating spending more , which is great yeah , it's interesting that I don't personally , I suppose I don't think about . I have an eye on what I'm buying , but I wouldn't necessarily be able to tell you what I spent last year and what I'm going to spend this year . It's more about finding the right present , if that makes sense .

Speaker 2 10:05

Yeah , I mean , I think people , I think people , a lot of people look at it . So you know , should I ? How much should I ? Can I manage to spend this year ? And they will probably remember what they bought people last year and thought , oh , I can't stretch to that this year . I bought people last year and thought , oh , I can't stretch to that this year , I'll do a bit more imaginative or buy something else , um , so you know , I think people have an idea of what their budgets are likely to be at this point , whether or not they've actually spent them yet . Some people have , obviously , but unlike me , I do my christmas shopping pretty late in the year yeah , yeah , I'm , I look for the deals .

Speaker 1 10:37

So I'm yeah , loads , buy , not quite that late . I fell foul of that when I worked at Boots and you see everybody the guys that have been in the pub who then come in and buy a bottle of perfume , just as you're about to shut the doors when we have to work out in stores which is always entertaining , but , yeah , not quite that . But , like everybody else , you know you're canny , aren't you ? You want a deal . You kind of know that full price probably isn't a thing , but that's , I suppose , the challenge . Then , back to those people selling and find me something that's unique , that's personalized or that's different to part my money with , rather than just the run-of-the-mill stuff .

Speaker 2 11:15

Yeah , interestingly , the AR Marketing Service come up with some really quite interesting findings and they looked at what Gen Zs looked at what Gen Z priorities are and actually a lot of those guys want traditional experiences and they prefer shopping for gifts in store . Nearly around 94% of them said they actually want to go in store , which is great news for stores Fantastic . But quite a few two-thirds are going to say they want to spend on gift experiences and this is the whole thing around experience and self-care , isn't it ?

Speaker 2 11:44

So things are shifting around what people are looking to buy .

Speaker 1 11:48

Yeah , yeah , and that generation , like you say , it's less about the more environmentally conscious and you know if you're buying something that's physical , is it going to be used or sit there or thrown away , recycle whatever . Or sit there , or thrown away , recycle whatever . And I think probably that whole COVID period has taught us that experiential stuff lives long in the memory , doesn't it , rather than physical stuff . So that's , yeah , clearly a market we'll keep an eye on .

Speaker 2 12:10

Yeah , and also a lot of younger people now are renting , not buying , of course , because they can't afford to and they don't want too much stuff , because it means they have to carry it from place to place , so and they haven't got the room for it if they're sharing , flat sharing or renting

Consumer Experiences and Future Plans

Speaker 2 12:23

, you know . So that that all goes into experiences , doesn't it ?

Speaker 1 12:27

absolutely brilliant . We'll pause there . Um , next month we'll cover off , hopefully , if we've got the figures where we got to in halloween , and then we can got a couple of exciting months coming up then with all the activity yeah , super brilliant . Thanks di speak to you soon .

Speaker 2 12:42

Thanks , simon , take care .