ReThink Productivity Podcast
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ReThink Productivity Podcast
Footfall Insights September 2025
Diane Wehrle CEO at Rendle Intelligence and Insights joins Simon for their monthly chat about footfall trends.August retail sales dipped 4.8% year-on-year despite stable footfall, with fashion and general retail taking significant hits. Consumers are demonstrating caution by making fewer transactions while spending slightly more per purchase, reflecting broader economic uncertainty and diminished confidence
• Consumer confidence remains low at -19 according to GFK's Consumer Confidence Index
• The savings ratio has reached its highest level since COVID, indicating people are saving rather than spending
• Mortgage approvals have dropped 2.4% compared to last August's 15.5% rise
• Upcoming November budget, rising unemployment, and global conflicts all contribute to consumer caution
• Q4 forecast predicts October sales down 3%, November down 1%, but December up 1.5%
• Food and drink remains strong at 25% of town centre sales
• Health and beauty continues to perform well, showing opportunity for retailers
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Welcome to the Productivity Podcast. We have our favourite returning guest and world CEO and founder of Rendall Intelligence and Insights to talk about August in the high street and retail Hi Di.
Speaker 2:Hi, simon. Well, that's a lovely introduction.
Speaker 1:It is. You are our favourite, favourite and most frequent guest. Oh, that's really nice to know. Everybody values your opinion.
Speaker 2:Oh, that's lovely, Apart from my husband. Yeah, that's a different podcast.
Speaker 1:So let's get into the detail then. This is August, so peak summer, Well before kids get back to school. I'm just trying to recall. The weather was all right, I think, wasn't it?
Speaker 2:It was good, it was nice. It was hot, but not too hot.
Speaker 1:It was movable.
Speaker 2:Unfortunately the results weren't hot, sadly the footfall, so activity into stores and also in high streets was about flat, to be fair, on last year, so it wasn't disastrous at all. But retail sales in high streets were not so flat. They actually dipped by 4.8% from August last year, which is a bit disappointing because in July they were only 1.4% below last year. So it seemed to be getting better. But August took a bit of a dip.
Speaker 2:Fashion took another hit, as did general retail. General retail is a mixture of stores and they include department stores, but also the discounters you know B&M, home Bargains, that sort of stuff, so that sales in those retailers dropped by 7.6%. So it wasn't a great August, to be fair. But every cloud has a silver lining and whilst the reason for the fall was a dropping transactions rather than customers, so the customers actually were about level for last year, so that's a number of unique customers buying, which is good. So that mirrored the footfall data. People were actually buying fewer, so they were making less transactions, so they were just very cautious. But those who did purchase their transactions that were made, the average transaction value rose slightly, so bought fewer items or made fewer purchases, but actually spent a bit more on what they did buy.
Speaker 1:So not it's good and bad yeah, but we've talked quite a lot over the years about this driving the atv has got to be one of the key metrics, because getting new customers clearly, as we've seen throughout the conversation, certainly in the last 12 months, is tricky, yeah, and there's a lot happening now in the world isn isn't there? I mean, certainly, if you focus on the UK, we've got budget coming up. I think we said it was November when we were doing some research offline. There's quite a bit of uncertainty around that isn't there, of you know, taxes, of what's going to happen to certain things with stamp duty or not, unemployment's taken a bit of a spike, amp duty or not, unemployment's taking a bit of a spike.
Speaker 1:We did productivity forum a couple of weeks ago. We ran it through a load of the, the models, gemini and all the others and they were predicting it's going to continue to rise to kind of mid-late 2025, 2026, sorry, and then drop off, so that that's not great. Clearly, there's donald's still still around and, unfortunately, ukraine war is still around, so there's loads of stuff going on, isn't there?
Speaker 2:Absolutely. I mean people. You know, the more people hear about bad news in the media and uncertainty, the more they feel nervous. And you know there are a couple of indicators that really reflect that. One is actually the savings ratio, which is produced every quarter and it's lagged by a quarter, so it's a bit out of date. Which is produced every quarter and it's lagged by a quarter, so it's a bit out of date. But quarter one, 2025, the savings ratio is sort of the highest it's been since covid and, excluding covid, it's the highest it's been since the recession in 2009, 2010.
Speaker 2:So people are stashing money away. Then they feel nervous, they feel cautious, so they're not spending unnecessarily and being profitably good, they're saving for a rainy day and also, you know, they're not spending unnecessarily and being profitably good, they're saving for a rainy day. And also, the housing market is always a good barometer of confidence, I always think, because when people feel confident in their employment, they feel confident in the economy, they feel ready to make what can be the most significant move for anyone in their entire life. And house price index is a relatively poor indicator of what's happening because it's dependent on what houses are up for sale, which doesn't actually show demand.
Speaker 2:But if you look at the number of mortgages granted last year, in last August they rose by 15.5% from August 24. This August they've dropped by 2.4%. So people are just not taking new mortgages out. They are being very, very resistant to making that enormous move because they just don't know what's around the corner. And that shows in the GFK Consumer Confidence their latest numbers, which actually are for September but are published mid-month. They've dropped back again to the July level of minus 19. So we're not seeing any improvement in consumer confidence at all.
Speaker 1:So people are just very, very cautious at the moment and that other house market stuff's on the back of interest rates going down isn't it.
Speaker 2:Yeah well, they went down to four percent, but you know they're because inflation is sitting at 3.8 percent. They're not going to go down much further, if at all, until the bank of england can see some reduction in cost pressures that you know, push inflation down a bit. So we've got this balance of high costs higher than desirable interest rates, which is great if you're saving, but not if you're borrowing. Unemployment that is higher than people want it to be. And people feel vulnerable at their jobs because, as we talked about in previous months, the NI changes have meant a lot of organizations have streamlined their workforce yeah and I don't, and I might be doing people listening to this service.
Speaker 2:I don't know for those people that don't see payroll figures if they really grasp how big a deal that is no, they probably don't actually, and I think I mean, you have some really good take on that, you know, and I think people don't really realize how big it is, even for a small business, even for me. I'm a one-man consultant, it hit me, you know so yeah, it cost it.
Speaker 1:It without giving figures away. We're 30 people and it cost it, cost us recruiting one person absolutely so that's one small business across the UK and how many are there?
Speaker 2:Yeah, so you know. And then I think you know, most recently has been the cyber attacks and whilst this doesn't affect every business, there's a vulnerability to business there and you know the fallout from the JLR cyber attack on small business. You know, I think if you're a small business, you're thinking to yourself. Actually, if my biggest customer has an attack and I lose business over the next year, what am I going to do? You know, contingency plans have been put into place which hit everyone.
Speaker 1:Absolutely. So we turn the corner and we're heading into some big events. So Halloween seems to get bigger and bigger every year. It feels like an americanism passes me by slightly, but anyway it's everywhere. It's already in the shops, as are all the christmas tubs and things. So halloween's on the way. Then we're black friday, cyber monday week month to christmas, then clearly we're at christmas, so I know you've been doing some thinking about what what the quarter four forecast might look like. Is there anything you can share?
Speaker 2:Yeah, absolutely. I mean it's interesting with quarter four. Obviously we're not in quarter four yet, so we've still got September to go, but it is possible to look at what might happen on the back of what happened last year. And the thing about looking at annual change or year-on-year percentage change is that it's very much a response to the previous year. So if you had a very strong comparable in the previous year, it's unlikely unless anything like we've gone into boom condition that we're going to carry on that trend. Likewise, if it was very poor last year, you're more likely to have a better number this year and I think every retailer in the world knows that, and that's the upside of having poor results in the previous year. So last year we had not a positive October, but it wasn't too bad. So I'm anticipating this October is going to be worse than last year. So I'm saying that we're looking at a drop in sales.
Speaker 2:Minus 3% In November was strong last year. I don't know if anyone remembers, but Black Friday was a really, really successful period. Of course, it's not just a day, it's a week now and actually black friday itself led to a sales increase in the history of 15 and a half percent annually, which is amazing. This year I'm I'm seeing that I'm forecasting that november will be one percent down on last year, because it was about two percent up last year. Likewise, december was a disaster. I think it was recognised that that boom that we'd hoped would happen in the last week or two didn't happen and sales were down by nearly 8%. So I'm actually forecasting an increase in sales this year in December of 1.5%. I mean, it's not amazing but it is a positive change. So we shall see how it starts to pan out, because you can never anticipate At the moment it's very difficult to anticipate what's going to happen economically and you know December will depend on, I think, what happens in the budget at the end of November how people feel.
Speaker 1:Yeah, clearly there's some stuff that's hitting the press, as I mentioned before, about stuff on houses and prices, and they're back on pensions again. So they're obviously feeling their way through and gauging some reaction. But yeah, I think there's a lot riding in november, certainly from probably a business point of view, if they touch business rates or even vat I'm hypothesizing here, but that that could be significant yeah, it all is.
Speaker 2:I mean, I think everything is just so sensitive at the moment there isn't really enough buffer to be able to withstand a change in any of the metrics, you know, any of the inputs and people, to not react to that. Employees are feeling really quite vulnerable, as you know, because employers are feeling vulnerable.
Speaker 1:Yeah, yeah, the market switched. We'd been having this conversation probably two years ago. It was a an employee's market and people would switch jobs when they saw it on linkedin and ratings were going up and there were retention bonuses and if you cast your mind back, they couldn't.
Speaker 1:I don't think they could find amazon delivery drivers, could they? And there were five, ten grand a year there and everywhere to sign on. Yeah, that's completely flipped now. So hence unemployment's going up and that nervousness. So not maybe a great avenue to turn the corner into the fourth quarter and that golden period for lots of organizations. But and we say every time, don't, there's still loads to play for, there's still money out there. There's this as a consumer. There's some great offers. Be really interesting to see how the, the big multiples and the supermarkets go from Black Friday through to Christmas. It could be a play into consumers' hands, with it being a buyer's market.
Speaker 2:Absolutely, and I mean there have been some positive shifts in sales. So the drop that we've seen in clothing sales, that drop is becoming smaller. It's improved over the last sort of eight months. So fashion isn't as bad as it was. At the same time, food and drink is still very, very strong. It's 25% of town centre sales now. Food and drink, followed by food, then followed by fashion and health and beauty, was still only about 9-10% of total sales in town centres. You know we've seen strong increases in health and beauty in the high streets. So people are going into stores to buy health and beauty and it's not just buying the products, it's, you know, the gyms and the nail bars and you know all of that self-care element is really, really strong. So there's lots of opportunities for retailers to climb on the back of that and to get some gains excellent lots to play for positive news for the next couple of months, hopefully.
Speaker 1:Yeah, we will pause there and we will catch up next month. Thank you very much lovely, thank you.
