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 February 2025
Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends and shopping behaviours
As the economic landscape shifts, we explore the paradox of increasing footfall yet declining sales in retail. With consumer confidence waning amidst inflation concerns and upcoming wage increases, businesses must adapt creatively to thrive in uncertainty
• Retail footfall rises by 6.6%, but sales fall by 3.2%
• Consumer confidence drops to minus 22 index score
• Inflation currently at 3%, affecting food and hospitality sectors
• Anticipated increases in National Insurance could impact businesses
• Average transaction values rise despite lower foot traffic
• Focus on innovation over cost-cutting for retail success
• February typically a slow month; preparing for changes needed
• The importance of retaining loyal customers emphasized
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Welcome to the Productivity Podcast. It's our monthly chat with Dan Wohl, ceo and founder at Rendell Intelligence and Insights. We're in December 2024 to January 2025. Hi, di, are we full of good news this month?
Speaker 2:Well, we have some better news, Simon, which is encouraging.
Speaker 1:Good good, that's what we like.
Speaker 2:Yep.
Speaker 1:Where are we at then?
Speaker 2:Right. So the initial indicators came through right at the beginning of the month in terms of footfall and sales from the BRC and they were really quite positive. So BRC reported an increase year-on-year of sales of 2.6% and their footfall data provided by Sensomatic was up by 6.6%, which is very encouraging. So that's all very strong. Slightly later in the month, beauclair came through with their sales data for sales in towns and cities specifically, and that wasn't so strong. That was actually a drop year on year 3.2%. So whatever's happening, people aren't. That increase in footfall spend is not translating into sales in the high street. So good and bad. So our high streets are being challenged.
Speaker 2:At the same time, other indicators have come through. Of course, the consumer confidence from JFK Confidence has weakened down to an index score of minus 22, from minus 17 in December and minus 19 in January last year. So people aren't feeling quite as confident, or even feeling less confident than they were. As we all know, inflation has gone up a little bit. This is now sitting at 3% and a lot of that is food inflation, but also inflation in restaurants and hotels, so hospitality inflation as well. So, yes, some good stuff and some not so good stuff out there. So it's sort of steady as she goes really, but the ONS came through with their sales data today as we're speaking, they've just released sales data for January, and that's in positive territory as well. So, on the whole, not too bad at all, although, as I said, high streets are still challenged in capturing that spend.
Speaker 1:So we're kind of in this holding. If it was a plane, we'd be circling above the runway, wouldn't we waiting for a space? But I suppose the space we're waiting for here is the understanding of April. Probably not April the 1st, the end of April. We're waiting for here is the understanding of April probably not April the 1st, the end of April the true impact to bottom line for any business, with people, for the NI and national living wage increases. That's what people are gearing for. So it feels like we're all just waiting with bated breath to see what happens, because that could push inflation higher, which will then impact interest rates when I'm the economist and then, I assume, will impact unemployment.
Speaker 2:Absolutely. I mean, I think the employment thing is where consumer confidence is being hit. I think people are feeling insecure and vulnerable around their employment. Vulnerable around their employment. I know that you know, speaking just sort of, you know, just speaking with friends and colleagues. Businesses are reorganising structures and processes to try and become more efficient and try and reduce their impact of the NI vulnerability. So that is impacting consumer confidence and of course, that flows straight through to a reluctance to spend. So, whilst footfall's gone up, whether or not they're actually spending money when they're going into stores is a whole different thing. You know, there's a lot of browsing going on, there's a lot of price comparison going on, um, so you know, people are just very, very cautious because, they said, you know what affects their, their employers affects them and that I suppose that impact on interest rates is a challenge because, as we mentioned a couple of times on previous pods, February is the next kind of cliff for fixed rate mortgage deals to end, isn't it?
Speaker 1:So that'll impact people in terms of hoping for a better percentage deal.
Speaker 2:Interestingly, when the inflation result came out, I was reading the Guardian and even the experts can't agree with what's going to happen. The Bank of England is saying that it's going to go up to 3.7 percent inflation and a lobby group is saying that they think it's going to go down. So you know, this uncertainty feeds through into interest rates, which then permeates throughout the economy, and the biggest overhead, of course, for most households is their mortgage, and if they're sitting at that cliff face waiting to swap over to another mortgage agreement, that's going to have a massive impact.
Speaker 1:And that then typically means if we cast our minds back probably to some of the earlier podcasts last year that we tend to rein in on high value goods, focus more on the day-to-day food and beverage fashion clearly has been a tricky market for for a long time now, but I think it was kind of food and health and beauty that were relatively stable or in growth for most of last year. Everything else becomes more discretionary.
Speaker 2:Absolutely. I mean, you know there's only so much you can afford to spend from your household budget. So the ONS results came through on retail sales and they were positive in terms of year-on-year results and month-on-month results. Actually, year-on-year overall, in terms of volumes they're 1% up. Food was 0.4% up what they call textile, clothing and footwear. So essentially, fashion, down 3.8 percent. You know, so you can see where people are spending their money. Um, they are just, you know, being much more careful around what they're spending.
Speaker 1:They're going back to the basics yeah, yeah, which ties back in with what we talked about kind of earlier last year and that, again reading the papers over this last weekend, there's now rumours that the government are looking to kind of clearly stimulate spend, which, ironically, was what the whole NI National Living Ways thing was supposed to do. But let's not get too political around things like closing cash ices to force people to spend rather than save. So again, there's lots of conflicting views and messages in there about what we should or shouldn't be doing and ultimately people become cautious, don't they? And therefore they don't spend.
Speaker 2:Absolutely, and I think you know the evidence of that is very clear, you know. You only have to look at the ONS information on savings, you know, and savings are still at 10%, which is the highest they've been since the pandemic. People are stashing money away for a rainy day just because of the uncertainty. We don't know where we're going to be, and you read newspaper articles and you know, you read it, and if the experts can't agree where we're going, then what hope is there for the rest of us? So people are simply A trying to replenish their savings pot from when inflation was in double digits, but then also trying to think about the worst case scenario and make sure that they've got enough buffer in case they lose the job.
Speaker 1:Yeah. So I suppose we're going to enter a strange period of time now, aren't we? February is typically a low trade period as people recover from Christmas, spend, get ready for Easter, so in any retailer it's normally one of the fallow months. And hospitality just because of general money, easter's, april this year, which ties in with the NI and National Living Wage stuff. So the next couple of pods will be quite interesting, I I think in terms of if we continue to see inflation grow, what happens with interest rates, what the ONS figures and the Beauclair figures say, because really I think by the time we're in, we're in May, hopefully we have a more stable view and read of the economy and where we're at, which will hopefully give people some confidence to spend and replenish the reserves.
Speaker 2:Absolutely. I mean, I think that the key thing for the next month or two is inflation, because that's going to drive any change in interest rates, which will then drive consumer confidence or not. So you're absolutely right, it's a fallow month. It's wait and see what happens with inflation. That's the indicator that we've all got to look at for um and um.
Speaker 1:we'll see where we go from there yeah, and my I suppose my worry is being quite knee-deep in some of this and I and national living wage stuff with various retailers, hospitality companies, and helping them think through the longer journey. If they run out of runway to april and getting their plans in place, the obvious thing to do is put cost up, which will then drive inflation. So we're back round in this kind of holding pattern.
Speaker 2:Well, of course, yeah, we've already seen inflation go up from 2.6 to 3 in one month. So it's starting. You know, and you know a lot of retailers the margins are so thin that they can't afford to absorb it. This just simply doesn't enable them to retain a viable business. So it's going to be passed. So I think we are going to see an increase in inflation to at least 3.5%, maybe 4%.
Speaker 1:On a positive note, there's some really good creative stuff happening there that's maybe not hit the high streets or the restaurants yet, from where people are trying to not pass all the cost on to consumers but be creative. Certainly lots of forward-thinking companies thinking more about driving additional services, average transaction value by being more attentive and having better quality service than just cutting costs. So there's a real mixed bag of people slashing cost, which can be very blunt and have significant long-term impacts, not not so good and detrimental sometimes to those organizations themselves. But this round of challenges we're seeing people thinking creatively and I have to say the ones that are thinking creatively I think will, will prosper, won't necessarily pass all that cost on to customers, which can only, again, only be a benefit.
Speaker 2:No, I mean actually I'm glad you mentioned average transaction value because that's one of the metrics that Beauclair report on. They look at number of transactions made by customers in high streets, the number of customers who are actually purchasing in high streets, and then their average transaction value. And average transaction value had increased last month by 1.8% from January last year and actually by 2.6% in fashion and 3.6% in health and beauty. So you know people are spending more. There are just fewer customers buying. So you know retailers really need to focus on their customer base those who are buying and try and exploit that and up that ATV because that's going to move the dial.
Speaker 1:Yeah, I think again we talked about it on a couple of previous episodes it's got to be a key metric for at least the next 12 months in any selling, customer-facing organization or driving ATV, because getting new customers is really, really tricky. Absolutely, you've got to be maximizing what you've got and making it important to them, connecting with them you know there's all the instagram social stuff these days but ultimately helping them part with money with you rather than competitor or nobody, because then it becomes the worst of all worlds yeah, absolutely, and we've talked a lot in retail over the last few years about community, about loyalty, um, and you know, interaction and it's never been as important as it is now.
Speaker 2:You know it's so much cheaper to interact with existing customers. They've proven they like your brand, whatever that brand is. Um, don't lose them, whatever you do. You know, even if you give them a discount or just retain them and then try and drive up atv from there are so important yeah, so positive note to finish on.
Speaker 1:Then, lots to play for, yeah, I suppose. Give, give your customers what they want within, within the realms of reality, of course, uh, but yeah, atv has to be the, the primary focus to, to drive additional revenue, and the more revenue it's not rocket science, but again basic economics the more you can drive revenue rise, the more margin you make, the less painful, hopefully, the challenges that we're facing into become.
Speaker 2:Absolutely absolutely.
Speaker 1:Perfect. Well, let's see what next month brings, fingers crossed. It's relatively stable but, as I say, it feels like we're in that holding pattern now until kind of mid-year, when everything comes into effect yeah, I think you're right.
Speaker 2:Um, it will be interesting in february, and very interesting because the january is difficult because we're coming out of christmas and you get a very distorted view of things. But february we'll start to see slightly more but a slightly bigger window on things brilliant.
Speaker 1:Thanks as ever, die, and we'll catch up next month thanks, simon.
