After disappointing figures from the retail industry in March, many were hoping that the late timing of Easter would allow the high street to rebound in April. However, new data from retail data company Springboard indicates that, despite the sunny weather and plethora of promotions offered by retailers, consumers failed to turn out in great numbers over the bank holiday weekend.
According to Springboard, footfall in shopping centres and on the high street dropped significantly when compared to Easter weekend 2013 – meaning that, although out of town retail parks enjoyed a rise in footfall of 6.1 per cent, it was not enough to outweigh the losses of 3.5 per cent and 5.3 per cent on the high street and in shopping centres respectively. This led to an average drop in footfall of 1.9 per cent for the retail industry as a whole.
Marketing and insights director at Springboard, Diane Wehrle, believes the poor result is due to improvements in the economy so far failing to filter down and benefit households in real terms.
She says; “People are still clearly very nervous about spending and these figures reveal the fragility of the recovery.
“Easter weekend is the next big trading opportunity for retailers after Christmas and a huge opportunity, but even good weather was not enough to encourage people to go out and spend.
“Though out of town locations are trading well, high streets and shopping centres have had a tough time this weekend, which is unexpected – I think it’s a function of the fact that the recovery we are seeing in terms of the macro-economic indicators, such as rising employment and falling inflation, haven’t yet filtered through enough for people to feel more confident.”
The result is especially disappointing as this year’s Easter weekend compares with one of the coldest recorded in recent years during the spring cold snap of 2013. Yet when taken regionally there was some good news, as coastal towns recorded a rise in footfall of 2.4 per cent which begins to make up for losses suffered by flooding earlier this year.
And it appears that more good news may be on the horizon for retailers, should forecasts made by economists turn out to be true. Last month, official data released by the Office for National Statistics confirmed that real wage growth has finally overtaken the rate of inflation, leading market analysts to predict a rise in consumer spending as confidence rises in time for summer.
IHS Global Insight economist, Howard Archer, warns that retail recovery will not happen immediately but should build in momentum steadily.
He says; “The encouraging news for retailers – and for overall growth prospects – is that consumers’ purchasing power should pick up over the coming months with inflation remaining muted and earnings growth strengthening, albeit relatively gradually.
“Given that consumers have faced a prolonged squeeze on their purchasing power, the ability and willingness of many people is likely to remain limited for some time to come.”
Do you believe that the balance of wage growth vs inflation will now encourage consumers to spend, or will it take longer for consumers to revert to pre-recession behaviour?
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