Wales’ footfall increase is cold comfort for retailers
FOOTFALL has risen in Wales across all shopping destinations. The high street saw a rise of 0.7% year-on-year, retail park footfall returned to growth of 2.1%, from -1.5% in October, and shopping centres saw a 0.2% rise from a consecutive five month decline in this shopping destination.
Sara Jones, head of policy and external affairs at the Welsh Retail Consortium, said: “With Wales experiencing footfall growth in all three shopping destinations, one might be mistaken for thinking that Welsh retailers will be rejoicing this festive period.
“However, as shop prices move closer to inflationary territory for the first time in four years, and given the ongoing economic pressures, uplift in labour costs and subdued consumer spending, the positive footfall figures will offer little comfort as we loom closer to a major hike on the rates bills of retailers across Wales next April.” Visa’s UK Consumer Spending Index says consumer spending is poised to fall this Christmas for the first time in five years.
Households’ expenditure fell by 0.9% annually in November, across the UK, despite shopping bonanzas such as Black Friday, according to the Index.
This marked the third month in a row of declines.
Visa’s report said the latest reduction kept spending on track to potentially see its weakest calendar year performance for spending growth in five years.
Face-to-face spending on the high street fell by 3.5% annually in November, while online spending increased by 2.4% annually.
Visa recently predicted that spending across the whole of the festive season will be lower than it was a year ago – the first drop since 2012.
Ms Jones added: “What we are desperately seeking is an early assurance from the Welsh Government that the rise in business rates will be no higher than the CPI measure of inflation, as has been agreed for firms in England.
“Given Wales lags behind the rest of the UK in terms of the number of empty shops, with one in eight remaining vacant, the Welsh Finance Secretary could go one step further and freeze rates in 2018, giving Welsh firms the much-needed boost they are crying out for.”
Mark Antipof, chief officer – commercial at Visa, said: “Festive cheer was in short supply for the UK’s retailers during last month as Black Friday promotions failed to lift consumer spending.
“November’s poor performance means that we stand by our earlier prediction that the UK will see its first fall in overall Christmas spending by consumers since 2012.”
He said cutbacks on big-ticket items such as car purchases and bookings for Christmas trips abroad were behind an annual fall in spending on transport and communication in November.
By contrast, he said, there was evidence of the “lipstick effect”, with people opting to buy smaller treats such as cosmetics and beauty treatments, rather than making big-ticket purchases.
Spending on transport and communication was down by 6% annually, while clothing and footwear spending fell by 2.1%, household goods spending declined by 2% and food and drink spending was down by 1.8%.
By contrast, spending on miscellaneous goods and services, which includes jewellery and hair and beauty, increased by 4.9% annually, while spending on hotels, restaurants and bars increased by 4.2% annually.
Visa’s index, compiled by IHS Markit, uses spending on Visa cards as a base and adjusts the figures to reflect all UK consumer spending, not just that on cards.