Footfall Insights March 2025

Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends and shopping behaviours

Consumer spending remains cautious as footfall stays flat across UK retail channels, rising just 0.2% in February compared to last year. Retail sales grew by only 1.1% while in-store non-food sales actually declined by 1%, revealing continued economic uncertainty despite some positive indicators.

• Retail parks performed best with a 2% footfall increase, while high streets and shopping centres saw just 0.1% growth
• All five major high street sectors (fashion, food/drink, general retail, grocery, health/beauty) experienced sales declines in February
• Fashion continues struggling with a 7.4% sales drop, while household goods showed improvement with 4.7% growth
• Fewer people are shopping (transactions down 8.1%, customer numbers down 6.7%), but those who do spend are spending more per visit (ATV up 2.9%)
• Consumer caution likely driven by lingering economic uncertainty, interest rates, upcoming National Living Wage increases, and global political factors
• Savings rates reached 10% - highest since the pandemic - despite wage growth of 5.9% outpacing inflation
• Upcoming holiday season may further impact retail spending as consumers prioritize leisure experiences over material purchases

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Chapters

• 0:00 Introduction to Retail Analysis
• 0:51 Footfall and Sales Performance
• 2:24 Major High Street Sectors Analysis
• 4:24 Consumer Spending Patterns
• 6:08 Economic Factors and Future Outlook
• 8:25 Holiday Spending vs Retail Impact

Transcript

Speaker 1: 0:05

Welcome to the Productivity Podcast. Diane Whirl, ceo and founder of Rendell Intelligence, is back for another chat about how we're faring on the high streets and shopping centres. January to Feb 2025, di.

Speaker 2: 0:19

Yep, simon, that's it. That's where we are. We're coming up to the second month of the first quarter Feels like we're whizzing through the year already and as we record, the sun's shining. So it does feel like we've turned the corner from winter into spring, stroke summer. So that's the key indicators of footfall and sales, of course. So footfall was static in February. Largely it was flat on last year. So it rose by 0.2% across all retail channels. So that's high streets, retail parks and shopping centres, and this is footfall into stores. So it's a good indicator of whether people are spending or not. The biggest increase, albeit just two percent, was in retail parks and that's probably because they're convenient and, um, they've got supermarkets on them.

Speaker 2: 1:16

So you have to buy food um just 0.1 percent increase in high street and shopping retailers, so pretty flat. Month on on footfall um, the brc reported sales um of 1.1 percent up on feb 2024 and that's a similar, that's the same, increase as happened. Annual increase happened in feb 2024, so 1.1. But non-food in-store sales actually fell by one percent. So whilst overall sales and that includes online and offline rose, in-store sales on the non-food side declined and really that probably reflects what's happening in the high street and Beauclair reports on high street sales, specifically in-store high street sales, and in January in-store high street sales on the high street dropped by 5.4%, so a fairly big drop. And that drop really occurred across all sectors other than household, funnily enough, which rose by 4.7 percent. But households hada pretty torrid time across the last 12 months, so it's coming from a low level.

Speaker 1: 2:24

What do we class as household? What's in that category?

Speaker 2: 2:26

So that's, you know anything that sells furnishings, soft furnishings, um, all those sorts of things. You know, um, anything that's vaguely associated with household really. So you know it's. It's sort of a mixed bag of things, but if we think about our homes, it would be any of those sorts of things that we would um, and we would find lighting, linens, that sort of stuff, yeah, and then, of course, the big thing was the challenging time that fashion was having and that's still having a challenging time.

Speaker 2: 3:04

So five sectors account for around 85% of all sales in the high street.

Speaker 2: 3:10

So they're fashion, food and drink and drink, general retail, which is department stores, and discount retailers, so mixed bag retailers, grocery and health and beauty, and all five saw a drop in their sales in february. Um, and the biggest drops were in fashion still, uh, 7.4 percent, and food and drink um, but what separates fashion and food and drink is, though they both saw a drop in their sales, the atv and food and drink. The average transaction value rose by 3.3 percent, so those people who were spending on food and drink were spending more. Likewise, in general retail, the drop in sales of 2.9 percent, but the atv rose by 4.7 percent. So those who were going into department stores, um were spending more. And in health and beauty, the same picture 4.7 percent drop in total sales but a three percent increase in atv. So some sectors, whilst you know facing fairly challenging terms overall, actually seeing some light at the end of the tunnel, really so we're back to the conversation we've had in a few of these previous chats around.

Speaker 1: 4:19

You've got to be maximizing the ability to sell to your existing customers because it's it's hard to get new ones or even retain, so you've got to be selling more to the same or slightly less absolutely.

Speaker 2: 4:31

I mean overall um, you know, in terms of what dropped um, in terms of the um, there's three metrics that make up sales, transactions, customers and atv. So you know how many people are buying, how many transactions they make and how much they spend. And um, you know there were big drops in both transactions and customers transactions dropped by 8.1 percent in february, customers by 6.7. So you can see that there are just fewer people buying um, but the atv rose by 2.9, as you said. You know, those people who do have cash uh, probably older, I would say less um, inhibited by heavy mortgage payments are still spending Because interest rates, whilst they've come down a little bit, are still higher than they were back in, obviously, 2020 and 2021. So they're getting a bit of return on their investment.

Speaker 1: 5:23

So we've got a cautious nation, I suppose, bracing themselves for, in some degree, national living wage stuff, and I, if you're an employer, we've got spring statement coming in a week or so, so again people be wondering what that's going to include. We've got, hopefully, the end to ukraine in sight and that that's impacted petrol prices, I believe. I think they're kind of an all-time low over the last two or three years at the moment. And then clearly the madness in in america, which um changes on a day-to-day basis or an hour to hour basis, doesn't it? So it it feels like we're still in this holding pattern. We again we discussed before of people not quite sure, maybe saving more, is that a thing?

Speaker 2: 6:09

it is. I mean, mean, the latest savings information from the ONS isn't out till the end of March, but in the first few months of the year and up to the end of last year, you know, savings were at 10%, which is the highest they've been since the pandemic, and I think everyone was feeling, you know the fact that people had to dip into their savings. Really because you really because just from the legacy of very high inflation and people are trying to recoup that, I mean, wage inflation has just come out the latest wage inflation information and that's sitting at 5.9%, which is clearly higher than inflation, which is great news, but that doesn't seem to be flowing through into retail spend particularly. People are being very cautious and holding back on that.

Speaker 1: 6:58

Okay. So similar to what we saw coming out of Christmas, I suppose caution, rising costs in mortgages, maybe people still paying off a bit of the spend or overspend from the festive period but also casting forward into the uncertainty. I suppose that exists economically and in the world economy. Economy I know again, at the time of recording the bank of england keeping quite close to their chest, what they're going to do with interest rates. Is it up, is it down, is it is it fit, is it stay fixed, which can have a significant impact either way absolutely and you know people aren't.

Speaker 2: 7:34

You know they don't exist in the bubble. They know that. You know their employers are making you know arrangements and changes to their businesses to try and absorb or offset the increased NI and minimum wage. And they're seeing these reorganizations within their teams. They're seeing some people leave and not replaced, some people have got a hold on recruitment, some people are making redundancies. So it makes people feel very nervous and that inhibits the amount they really want to spend. Sales were up, total sales were up by 1%, so it's a marginal increase over the year, but that's not exciting really. It's not saying that people are going out there and spending. I mean in. You know, in january actually they're up 2.6 percent and here in back in february they now dropped down to 1.1 percent up.

Speaker 1: 8:28

So you know there's clearly a cautiousness sitting out there amongst consumers and I assume in the coming months we'll start to see how that's impacting holiday bookings, all that kind of stuff, as people again cast even further forward into the summer absolutely, and I think you know it's going to be interesting again to see whether this, the rush for holidays, carries on and whether people prioritize holidays and leisure over things.

Speaker 2: 8:50

Um, because clearly you know there is some spending he had when people were cold. It's because people want, you know, to upgrade their wardrobes and to buy some stuff to go away with. But, um, generally, if you're spending a fair chunk on a holiday, you will possibly not spend it as much in the high street, um, or in store anyway. So, um, yeah, it's going to be really interesting to see whether the trend for, and the demand for, holidays carries on this year. I mean, obviously, the holiday um, adverts are out, the offers are out, um, so that's tempting people already good, we'll pause there.

Speaker 1: 9:25

We'll see where we are when we come back and look at, uh, february to march, because hopefully the spring statement had been delivered by then and we'll know about interest rates and all those other things that people will be um slightly anxious about. So thanks once again, diet, and we'll catch up next month thanks, simon.