Warning as shops fail to make up for lost revenue
RETAILERS can no longer rely on Christmas trading to make up for revenue lost earlier in the year, a report suggests, as shopper numbers across Wales continued to dwindle in December despite big discounts being offered.
The WRC (Welsh Retail Consortium)-Springboard footfall and vacancies monitor revealed retailers should not ignore the warning signs of sales bonanzas failing to stimulate customer activity.
Discounting “is severely eroding the strength of Christmas as a major trading period”, the report said.
The latest report found that footfall in Wales fell by 3.4% year-on-year in December – worse than the 2.6% decline witnessed across Britain.
The bleak picture marks six months of decline in Wales for firms – with only two months of the past 12 seeing growth across the country.
Footfall on the high street fell by 1.9%, 0.5 percentage points above the December 2017 decline of 2.4%.
It was not just city centres across Wales which suffered. Retail parks saw their footfall drop by 4.0%, a steeper decline than the 2.0% cent in December 2017.
Sara Jones, the WRC’s head of policy and external affairs, said: “It was a dismal December for Welsh high streets as shopper numbers wilted once again, for a sixth consecutive month.
“Retailers had been hoping for positive festive footfall after a bruising year, however the figures sadly paint a very different picture and retailers’ performance will have increasingly rested on their online offering.
“With uncertainty over Brexit, and with Wales set to maintain its position of having the highest business rates in Great Britain, it looks like there will be little respite to some of the challenges that the industry faces.
“The next few months will be make or break for many operating in our retail destinations, amongst all of the uncertainty we can be sure that difficult decisions will be need to be made unless we see a more supportive operating environment.”
Diane Wehrle, Springboard marketing and insights director, added: “The 3.4% decline in footfall in Wales in December 2018 the ninth in 10 years, and the seventh consecutive year of decline, is undeniably strong evidence that retailers can no longer rely on Christmas trading to redeem revenue lost earlier in the year.
“Following drops in Wales’s footfall of 2.3% in October and 3.1% in November in 2018, unless the dynamics underpinning consumer demand were going to rapidly shift, it was always going to be unrealistic to expect footfall to recover. Even in the third week of December, which was adversely impacted by snow in 2017, footfall also dropped by 4.3%. “
Ian Davis, director of Rules of Play, which is based in the Castle Arcade in Cardiff, said as a small boutique store they had maintained their place in the market, but there were certainly fewer people hitting the shops in the countdown to Christmas.
He added “I would say we did the same in December as last December.
“The number of people mooching around the arcade was less. People are nervous over the Brexit situation, and are more prudent.”