Retailers see tough future as footfall drops
Footfall (the number of shoppers passing through stores) dropped by 1.6% last month, the worst result for January since 2013, and customer numbers on the high street fell by 1.9%.
Data from Visa showed household spending was down by 1.2% year-on-year in January. Visa accounts for around one-third of consumer payments and suggests that the next set of retail spending figures may be weak.
Warren Evans is the latest in a long line of retailers having problems. Toys R Us UK, Morrisons, Marks & Spencer, Topshop/Topman, B&Q and East have all reported problems and potential job cuts, while furniture group Feather & Black has recently found a buyer after going into administration.
Research from NatWest and consultancy Retail Economics, released last week, painted a difficult picture for the retail sector in the year ahead. Key findings included:
- sluggish wage growth of 2.2% seen in 2017 will continue in 2018
- retailers’ profitability remains under pressure, with operating costs increasingly high
- uncertainty over Brexit and structural changes within retail will exacerbate challenges
- the shift to online and the experience economy will further strengthen the case for business transformation
- 36% of consumers expect another interest rate rise by June 2018.