Consumers desert shopping centres
Poor summer footfall for out-of-town centres shows scale of task ahead for Ashley’s House of Fraser
The decline of department stores has been laid bare by figures showing how consumers are staying away from shopping centres dominated by the likes of House of Fraser and Debenhams. While restaurants and bars boosted visits to high streets and retail parks during the hot weather last month, shopping centres suffered. Data from the British Retail Consortium and Springboard showed that 3.4 per cent fewer Britons visited a shopping centre in July than in 2017.
THE decline of department stores has been laid bare in new figures showing how consumers are staying away from shopping centres dominated by the likes of House of Fraser and Debenhams.
While restaurants and bars boosted visits to high streets and retail parks amid the hot weather in July, shopping centres suffered. Big-name department stores that once drew shoppers to outof-town locations are no longer pulling in the crowds.
Data from the British Retail Consortium (BRC) and Springboard showed that 3.4pc fewer Britons visited a shopping centre in July than last year. The downward trend accelerated from the previous three months, when there was an average 3.2pc decline.
During traditional shopping hours, the picture was even worse for department stores. Shopping centre footfall in July was down 3.9pc in retail trading hours. Diane Wehrle, of Springboard, said that the decline of department stores played a major role, “with footfall entering these types of stores declining by more than footfall generally”.
The figures highlight the scale of the challenge facing the Sports Direct tycoon Mike Ashley as he takes control of House of Fraser with a promise to turn it into the “Harrods of the high street”.
He is due today to finalise his £90m acquisition of the chain in a pre-packaged sale by administrators EY.
Mr Ashley plans to press ahead with the closure of 31 of House of Fraser’s 59 stores with the loss of 6,000 jobs. House of Fraser pension holders face uncertainty as although the retailer’s retirement scheme has a funding surplus, it is likely to be offloaded to an insurer with only a small payment from the proceeds of the administration. The Pensions Regulator said yesterday it was monitoring the situation closely.
Department stores may be going out of fashion, but the hot weather provided a small lift for high streets as shoppers spent more time on food and drink outside. It was the third consecutive month of growth, with a 0.3pc bump in activity.
Helen Dickinson, the BRC chief executive, warned that the weather may offer only temporary respite from seismic changes in bricks and mortar retail as the threat from online rivals rises.
“There’s no escaping the fact that retail is changing,” Ms Dickinson said. “As shops close, we need new businesses to emerge to reinvent the nation’s high streets. But that cannot happen if the burden of business rates they face continues to rise year on year, which is why we’re calling for a freeze in business rates in the Chancellor’s next Budget.”
Analysis by The Daily Telegraph has found that 1,334 shops have been shut or earmarked for closure since January, putting 23,400 jobs at risk.
Maplin, Toys R Us and Poundworld have already collapsed, with Mothercare and Carpetright to close stores via court-backed restructurings.
The turmoil is hitting shopping centre owners hard. A mega-merger between shopping centre giants Hammerson and Intu, which would have created a £21bn portfolio of retail and leisure properties in the UK, France, Spain and Ireland, was abandoned earlier this year after Hammerson shareholders expressed concern about increasing their exposure to British shopping centres.
It would have been the second large merger deal between shopping centre owners in 12 months, following Westfield’s buyout by Unibail-rodamco in December 2017.
Data from Visa has underscored the footfall patterns in retail. Consumer spending was down 0.9pc in July compared with last year. Restaurants, hotels and bars enjoyed higher spending in the hot weather but those selling household goods suffered.