The New Year starts on different note in 2017, with shopping centres seeing sales cut in half from 2016 and a significant increase in online sales figures.
Springboard Insights, a UK retail consultancy, released figures that give evidence of a 23.8% reduction in shoppers (year-on-year) purchasing at retail parks located both in and out of town. A more dramatic decrease in sales was seen at shopping centres and on the high street, with respective figures at 49.5% and 12.7%.
The factors considered responsible for the change are a mix of the colder weather, trading hours on bank holidays, the thought of a going shopping in busy December and easily accessible online shopping options. People simply did not appear to want to be outdoors over the Christmas season, “the ease and comfort of online shopping proved too enticing for shoppers keen to snap up further discounts in the sales rather than bracing the cold outdoors,” stated Diane Wehrle, a director with Springboard Insights.
The initial trading figures of the year are often seen as an indicator for the year, meaning this year looks somewhat uncertain – “retailers traditionally see the first trading weekend of the New Year as a sign of things to come, and if this still rings true the industry is set for a rocky 2017.”
The spiralling figures followed on the back of poor Boxing Day figures which saw a 7.3% reduction in footfall from last year. However, in spite of the mixed start to the year retail analyst Nick Bubb recommends not assuming the worst, suggesting other reasons for the shift in footfall figures and sales, “the weekend obviously wasn’t fully comparable to last year, so they need to be taken with a pinch of salt, particularly given the continuing shift to online shopping”. Bubb went on to say, “given the increasing traffic congestion on the roads, there is every reason to expect that more people will opt for the convenience of online shopping in 2017 and that will further undermine high street footfall, at a time when consumers are going to be increasingly careful about how they spend their money, as real incomes come under pressure.”
Investors and analysts will be watching the UK retail sector closely as some of the larger companies get ready to publish Christmas trading figures. Large fashion retailer Next will set the scene, with figures expected on 4 January. Sainsbury’s figures will be published on 11 January, followed closely (24 hours later) by Tesco, Primark (owned by Associated British Foods) and Debenhams.
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