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.
Whether you're a business owner, manager, or employee, this podcast is a must-listen for anyone who wants to learn how to get more done and improve their bottom line.
Here's what you can expect to learn:
- 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
Don't miss out on this opportunity to learn from the experts and get ahead of the curve with your own business.
ReThink Productivity Podcast
Footfall Insights January 2025
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 November to December 2024 covering the big festive period
- A review of 2024
- A look at the year ahead
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Welcome to the Productivity Podcast. Diane Wills, ceo and founder of Rendell Intelligence and Insights, is back, and it's the big one Di. This one covers Christmas.
Speaker 2:It is it's the final month of the year, the key one for retail out there.
Speaker 1:And are we going to be impressed? Are we going to be disappointed? Is it going to pan out as we think? Because we've had a bit of an up and down year, haven't we? It started off a bit gloomy, got a bit better, then plateaued off, you know, we had a change of government, we had the donald's empire, as we speak now. So all the american unrest, weather wasn't great. Um, so it's been a turbulent economic year and year of change. So is it? Has it all come good at the end?
Speaker 2:um, I would love to say yes. Um, unfortunately I can't say that I thought you might say that.
Speaker 2:There are some indicators that are interesting and I think it's important for the industry to be aware of, but generally it's been a really challenging Christmas. I mean, this was coming from a Christmas last year where inflation was much higher, interest rates had obviously gone up and everyone was reeling from that and we were hopeful that this year would be sort of a bit of a recovery. That wasn't to be the case, um and but it has has yielded some interesting trends that I think we ought to keep a watch on for the coming year, because that's going to impact how retailers look at their businesses to give us the key headlines then.
Speaker 2:Right, so we look at footfall first. So footfall, obviously, number of people, volume of customers down in December year on year by 2.2%, according to Sensomatic, and this was better than last December when it was down by 5%. So that's something. And, however, this December did not include Black Friday this year, so that 2.2% reduction actually includes Black Friday, which doesn't sound very positive, does it? But it's coming from November where it was down 4.5%, so it falls down. Sales as measured by the BRC, so this includes online and offline sales, actually increased in December year on year by 3.2%, which sounds encouraging. But November was down by 3.3% and November didn't include Black Friday, hence 3.3% down. December did 3.2% up.
Speaker 2:So BRC were saying that actually their narrative was that actually December did not help the quarter. The quarter was a help the quarter. The quarter was a pretty awful quarter and in terms of sales in high streets, which is produced by Beauclair so this is in-store sales in high streets, which is a really good barometer of what's happening in retail generally sales were down by 7.9% year on year from December last year and that's the worst result since about July when it was down 9.3%. So pretty, pretty abysmal. But Boclair work on a calendar month. So their December did not include Black Friday but their November did, and sales were up by 1% in November due to the success of Black Friday, when on the day itself sales were 14 and a half percent in High Street. So High Street's really responded to Black Friday as we talked about in our last yeah, we did, yeah.
Speaker 1:So that that that says then I suppose people have gone early this, gone early this year yeah, yeah, they have gone early um last year yeah, last year.
Speaker 2:I can't. I've got to get my head around where we're at in 2025. So, yes, they went early, they made the most of Black Friday and, of course, black Friday was a week later, so it was closer to Christmas, so everything was set up and running for Christmas, so it felt like it was Christmas trading which helped Black Friday. This year it wasn't help because consumer confidence has been low. It was improved slightly from November in December at minus 17,. Improvement on minus 18, and that's from GFK, but it's still not great.
Speaker 2:But I think what was interesting, and the interesting trend I picked out from the Beauclair data particularly, was that the reduction in sales in high streets was driven by fewer customers. We talked about the drop in footfall, fewer transactions, but actually the ATV was virtually the same as last year. So what that's telling me straight away is that those who have money are spending more, but there are a lot of people out there who are spending a lot less or not spending at all, and so it's all this polarization of spend is taking place. So you know people with cash, who are savings, who maybe are retired, who don't have mortgages, they're insulated, but everyone else is really finding it quite challenging.
Speaker 1:And that's then, I suppose impacted by we talked about it before, I think is it the end of January 25, where there's the next tranche of people whose fixed rates mortgage disappears.
Speaker 2:Absolutely. Yeah, there's a whole tranche of people coming through that are going to see this fixed rate mortgage disappear, and, of course, we've heard messages coming out of the city that interest rates are not going to drop as we'd hoped they would. Inflation is pretty stubborn at the moment. It dropped in December to 2.5% from 2.6% in November, but it's not moving, you know, downward rapidly. There are some bright spots in inflation clothing and footwear inflation has dropped. It's just 1.1% in December. That which was good, but things like restaurants, you know things that affect our spending pattern they're still 3.4%. So, you know, and of course, this is still increasing prices. You know, though, if there's lower inflation, it's fantastic, but actually it means that all the increases we've had historically have been now baked in and we're seeing further increases, so that's still a challenge for consumers I suppose, just to give people a check on, is the time of recording current headlines, so morrison's the time of recording current headlines, so Morrison's the time of recording.
Speaker 1:have just announced 200 job cuts for retail people team. We've got Sainsbury's who've just announced 3,000 job cuts as part of their looking at cost. There's River Island cutting head office jobs amid profit struggles. Poundland have, according to the papers, got Alex Partners in looking at how they can trade their way out of some poor trading conditions. So there's not many good news stories from big organisations and part of me thinks that's based off some of the numbers we've just discussed in Christmas, but also the pending NI threshold drop and increase in national living wage. So this run from January through to start of April when they kick in, it could be really significant in jobs, unemployment, economy itself and set the store for the rest of the year.
Speaker 2:Absolutely. And of course, you know, yesterday, as we were recording yesterday, primark came out with some very poor results, which you know. Primark have been sort of the handrail for the high street, you know, and they're a good indicator of what's happening out there because you know they're a value retailer, they're the darling of the high street, but they trade. They don't have a transactional website, they trade out of store only and most of those are in high street locations and they had a really tough time. So, and most of those are in high street locations and they had a really tough time. So that's reflecting the fact that those people who don't have spare cash are not spending. You know, they're just feeling really, um, really concerned.
Speaker 2:And all this, you know the, the, the, you know the pending impact of the increase in ni is making, I make, is making people feel nervous. They know their employers are making changes and cuts to try and offset that. They're aware of it and so they're feeling vulnerable. And in fact, um gfk, they've released their consumer confidence index for january. So they work on a mid-month cycle, so their january results have just come out and actually consumer confidence has dropped from minus 17 overall index score in december to minus 22 january. So that's a significant drop and that's reflecting how people are feeling about. You know their economic situation personally and also the wider economic situation across the uk yeah, so just again, just to circle back on the primark stuff.
Speaker 1:so primark uk and ireland sales declined by four percent 16 weeks to jan fourth of jan 25, 6.8% like for like. But then if you compare that to Spain, portugal, france, italy, central Europe, eastern Europe and US, all increased. So the US recorded a 17% rise, central and Eastern Europe growing by 22%. So just some wider worldwide context of you know it's acutely us at the moment, unfortunately it is.
Speaker 2:It is, um, I mean, primark are a new entry into the us, so they're a bit of a darling out there, so they've got those newbie games. To be fair, yeah, um, and they're going for big flagship stores in places like chicago and boston that are super duper, I mean looking beautiful, um, so they in partly that will be that, but you know, I think you're under. You're right. It's an underlying trend here that it's us and you know we've got this, you know thing at the end of the road sitting there waiting for us to hit us on the head, and everyone feels it, you know. Company organizations feel it, consumers feel it, so people are just railing back.
Speaker 2:And also, the thing I haven't talked about this podcast yet is savings. People are still saving 10 of their household income and that's a high that it's been since covid, you know, because people feel vulnerable, they want some backup and so they're trying to make sure they set their finances straight before they they move on and, you know, before anything happens to their jobs. So that is that's still reigning in their spending. Particularly, and also, you know, underline that there's structural shifts around consumer demand. You know we're very much focused on self-care and holidays entertainment. You know that that's our priority as consumers, increasingly so. You know, if you want a holiday this year, you ain't, you're not going to go out spending in the high stream, necessarily yeah, it's interesting a number of conversation I've been having over the last couple of weeks.
Speaker 1:Uh, you know, hospitality is, is is going to be tricky because it's where people all pull back and we know that they've already um had a tricky time. You know that whole covid and post that people are uncertain about recruitment. They're uncertain around annual pay rises that typically come April the 1st for those that are on a salary along with national living wage. So there's a real, a real sense of uncertainty, as ever. I think the you know, the strong will survive. There'll be some consolidation, which is good if it keeps people in in jobs. But I suppose my mind's's starting to get to the place of. I think this is going to be really tricky. To slash costs and save your way out of it.
Speaker 1:I think the smart organizations will find the sweet spot of tech and people and and we'll focus on driving ATV the thing I've been talking about in a number of sessions pre and post Christmas is it's really difficult to get new customers and to some degree in lots of organizations that's marketing's job, that's, you know, trading's job, buying's job. As an operator, you can't go and get people off the street and get them into your shop. You've got to rely on other supporting functions, but I think businesses need to be focusing on the ATV. If you can drive ATV, ie sell more to the same people. That's got to be the way to win because that grows sales, which then gives you the flexibility and the headroom to do all the other stuff that you need to do to keep moving forward.
Speaker 2:Absolutely, and actually the cost of that sale is much lower because trying to acquire new customers is much lower. Because you know trying to acquire new customers it's very expensive because through the marketing function you know you need to really push out there. There's a lot of noise out there. You're absolutely right. You know the fact that this polarization is taking place amongst people who have money are spending more and those who are not. If you can actually just increase the ATV of those customers and of course, once the customers come in the store, just convert them. You know conversion is typically quite low amongst a lot of retailers. You know, once they walk through the door, do everything you can to sell them, something you know and that makes because they come in in the first place so you don't have to incur any additional costs to sell to them. It's literally just colleague employee time.
Speaker 1:But maximize that opportunity and, as you say, that will where the some of the the low-hanging fruit gains will be made yeah, and we're not going to do that by locking everything up, putting it behind cabinets because shrinks high and then having less people on the floor. There's a real and again it's been a theme of some of the stuff I've been talking about there's a real fine line between loss prevention and sales prevention and I think again some organizations have stepped into that. We've reduced shrink, which I know is a big problem and really challenging for everybody, certainly in customer-facing organizations. But sometimes what you save you're damaging sales and again there'll be a turn. People will take the cabinets off.
Speaker 1:The biggest, biggest thing we've seen to reduce shrink is having a presence of people. So the more people you can recycle onto the floor, one back to your point. You've got somebody there for the conversation Morning. We've got this on offer. Oh, I see you bought this. This goes really well with it, all that stuff that you know if it drives ATB by 50p, that's massive. But also helps with the shrink point of view of the opportunity still be put off by presence. The professionals, the gangs unfortunately they are what they are and that's really difficult but the opportunities will be put off by people being around I think that's absolutely right, absolutely right.
Speaker 2:Of course, you know the additional sales you generate can to some degree offset the shrink, you know, um. So you're right, there has to be this balance, because it is very non-customer friendly to see everything locked up or empty jars and empty pots and all that sort of stuff, and you know customers know that. Then, when retailers do it, that their priority is about security and it's not a nice buying experience and it just pushes you either to another retailer or online because it becomes very transactional yeah, absolutely, absolutely.
Speaker 1:So I think there's there's lots to play for. Let's finish on a positive note because, um, there's been some quite significant figures, certainly some negative ones. I think there's lots of lots to play for and for me, the key is I don't think you can just save your way out of this. You've got to be tactical in some areas, as we've talked about what's happening in the press, but actually, strategically, it's got to be about people. It's got to be about driving atv. That's where the opportunity and sales mass, everything. Once sales start to grow, it gives you so much flex and so much belief in a business. All the, all the doom and gloom disappears. So that's the positive for me. Um, we'll see what january holds die. I have a funny feeling we might be repeating some of this conversation in feb.
Speaker 1:Um yeah but uh, but let's see, and thanks again for joining us, thanks for 2024 and we'll keep the conversation going this year great, that's been great.
Speaker 2:Simon, really look forward to every month good, we'll catch you soon take care bye.
