Retail performance over Christmas a reason for good cheer in 2024?

The combined effect of Covid and higher bills across the board have hit certain business sectors more directly than others.

Retailers in particular have had a double hit from both these impacts and our increasing love affair with online shopping. This trend has been creeping up over the last 10 years from less than 10 per cent of total spend to around 20 per cent just prior to Covid.

The resulting lockdowns accelerated the trend at an alarming rate and quickly these figures have increased to today’s levels of around 30 per cent and growing.

Our much-treasured local producers and retailers who are the backbone of many of our high streets and market towns cried foul because of declining footfall, increasing business rates, increasing costs of servicing debt and increasing costs of parking.

Both our district councils have done their very best to help but success has been limited as a result of economic crisis following economic crisis.

It has also not been helpful that some bright spark invented Black Friday which has turned the traditional run up to Christmas retailing and the fun of Boxing Day sales into a damp squib in many places.

It was therefore with great trepidation that we entered the month of December, a crucial period when in six weeks many retailers make their entire profit for the year.

So how has it gone?

The figures have just been released for Boxing Day. These show that footfall was up four per cent across all UK retail destinations boosted by an unexpected return to high streets, where some figures are up by 8.8 per cent compared with Boxing Day 2022.

These figures are undoubtedly influenced by Central London, which has experienced a renaissance of international shoppers attracted by its reputation as a world class retail and leisure destination.

Undoubtedly this boost has not been experienced across the country or in Northern Devon, where online and retail park shopping has grown at the cost of high streets.

Even taking into account the special circumstances of London, nationally the footfall this year is around 15 per cent lower than 2019. In the run up to Christmas the winners were retail parks and out-of-town centres with High Streets showing a dip of 10 per cent against 2022 - a clear indication of the lack of cash and belt tightening resulting from 14 increases in interest rates.

It is estimated that around the UK there are 45,000 retail businesses in financial distress (4,500 of whom are in ‘critical distress’).

A deeper dive into these figures is beginning to indicate trends around which we can start to rebuild the commercial and social heart beat of our town centres.

Demand from shoppers has been strongest for clothes, shoes, skincare, beauty, make-up and accessories. This plays to the strengths of many of our local craft and creative- industry producers.

The cost of setting up shop has also been greatly reduced with many national retail chains shrinking leaving big gaps in high streets and landlords who are keen to enter partnerships with occupiers and to offer deals based on a share of the passing turnover and very easy lease terms.

This is undoubtedly an opportunity for the restoration of High Streets full of local shopkeepers. 

The need however to be commercially and tech savvy has never been more important. The in-shop experience has somehow to marry the online and offline world including same day delivery to stores and returns able to be handled immediately.

Payment and checkout processes need to look beyond contactless cards and mobiles. Across Asia, QR code payments have become mainstream making the problems of queuing a thing of the past.

An acute awareness of customer sentiment is essential. Sustainable and ethically sourced products have become a ‘must-have’ rather than a ‘nice-to-have’. This opens the door for second hand goods and a focus on repairing rather than replacing.

Price sensitivity is inevitably a key to success particularly for those catering in the discretionary spending part of the market. This combined with increased agility will help to build and retain a loyal customer base.

Finally, it is essential that high streets are places of fun mixing shops, leisure, residential and safe spaces. This will increase the dwell time.

I still find it frustrating to see blanked-out windows above shops which could be creating much needed residential accommodation, extra footfall and building the night-time economy.

Plymouth has been given a beasting for removing trees which (for those who really knew them) were well past their sell-by date. Their replacement scheme is about to be unveiled which will transform what has been for years a concrete jungle. Exeter is planning to plant one million new trees, many around the city centre.

It may not be universally popular but we may need to consider shrinking some of our retail areas down to a core offering which fits with market demand.

This stuff is not revolutionary or destructive, it is common sense. If it restores the vitality of our high street, I am all in favour.