The reopening of indoor hospitality in England has failed to boost footfall to retail destinations such as high streets and shopping centres, according to new data.
In the four weeks to May 29, visitor numbers across UK retail destinations were 27 per cent below 2019 levels, according to the consultancy Springboard. English pubs, bars and restaurants were permitted to serve indoors from May 17, but footfall was actually lower relative to 2019 in the final week of May than in the first.
The pattern of retail parks outperforming other retail destinations continued with visitor numbers declining only 5.7 per cent compared with a 36 per cent drop in high street traffic over the same period.
Retailers reported an initial sales bounce which followed reopening on April 12 was more pronounced than last year, as the vaccination rollout has made people less fearful of being in busy locations.
But Diane Wehrle, insights director at Springboard, said the May recovery had been “more subdued” than she anticipated.
“We had this huge surge in footfall after April 12 but then we fell foul of the weather in May,” Wehrle said, adding that last year’s reopening in June saw a more modest but more durable increase in footfall helped by better weather and the Eat Out to Help Out scheme, a government initiative to incentivise dining out in August.
She said the extent to which employees return to office work after the planned easing of all restrictions on June 21 would be an important driver of footfall in the coming months: “The hybrid working model could well change our shopping behaviour”.
Paul Martin, head of retail at KPMG, said lower shopper numbers did not necessarily translate into lower sales because more shoppers than usual were spending rather than just browsing. “Conversion rates are 40-50 per cent above normal but we expect them to be lower by the end of the summer,” he said.
The British Retail Consortium, which reported a 7.3 per cent increase in sales for April compared with the same month in 2019, is due to publish retail sales data for May on June 8.
KPMG, which helps the BRC compile its data, predicts that total retail sales will rise by around 5 per cent this year as consumers spend some of their accumulated savings.
But the failure of visitor numbers to recover to anywhere near pre-pandemic levels in many locations will still be a concern to retailers whose operating costs are set to increase markedly in the months ahead.
The relief from business rates in England, in place since the start of the pandemic last March, will be subject to a £2m cap with effect from the end of June. For large chains that means the relief all but disappears, according to John Webber, head of business rates at Colliers.
The real estate adviser estimates that Next will end up paying £84m during the current tax year while Frasers Group — which has described the reduced relief as “near worthless” — will pay £50m and Primark £40m. Retailers have also been barred from using Covid-19 as grounds to appeal against business rate valuations.
A moratorium on evictions and winding-up orders also ends on June 30, leaving retailers open to court action over almost £3bn of rent arrears built up during the pandemic, while a government-supported reinsurance scheme for trade credit insurance finishes on the same day.