Demand will defeat "retail Darwinism"
February 10, 2021
Pent-up demand will prosper over "retail Darwinism' say analysts as consumers spending reports for January were predictably bad for the non-essential sector.
Consumer spending fell 16.3 per cent in January compared with the same month last year, the largest annual drop since the spring, according to Barclaycard data. Furnishing stores were 14.6% down.
According to BRC-ShopperTrak data, footfall was down by 78% in January compared to 2019 – this compares to the 76% decline in the November lockdown.
Andy Sumpter, Retail Consultant EMEA for ShopperTrak, commented: “With the first full month of a new national lockdown, January certainly won’t have been the start to the year retailers were hoping for, as once more they had to shut up shop.
“But while it’s easy to let shuttered stores paint a bleak picture for the future of the High Street - with many retailers now having faced almost a full year of store reopenings and closures - it’s important to remember that when retail has reopened from lockdown, demand for in-store shopping has returned each time.
“And while the pandemic may have accelerated ‘Retail Darwinism’, those that have used this time as an opportunity to reset and invest in the operational foundations to meet new demands will be well placed to capitalise on pent-up demand for the in-person shopping experiences we have all been missing, as well as setting themselves up for strong, long-term growth.”
“But while it’s easy to let shuttered stores paint a bleak picture for the future of the High Street - with many retailers now having faced almost a full year of store reopenings and closures - it’s important to remember that when retail has reopened from lockdown, demand for in-store shopping has returned each time.
“And while the pandemic may have accelerated ‘Retail Darwinism’, those that have used this time as an opportunity to reset and invest in the operational foundations to meet new demands will be well placed to capitalise on pent-up demand for the in-person shopping experiences we have all been missing, as well as setting themselves up for strong, long-term growth.”
Barclaycard data also showed consumers are holding their nerve for the future. Confidence in household finances stayed steady at 67 per cent, but while younger Brits (18-34-year-olds) are feeling considerably less confident (55 per cent), the over 55s, who are a key demographic for flooring sales, demonstrate much higher confidence at 78 per cent.
Helen Dickinson, Chief-Executive of British Retail Consortium, asked for greater Government support after the footfall data was published: "Government must reassure those hardest hit by the pandemic that they will receive vital financial support. Without urgent action, including a targeted extension to business rates relief, we will continue to see the collapse of more stores and consequent loss of many more thousands of jobs.”
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