Storms and virus fears dent spending and footfall in UK, clothing sales drop
UK consumer spending and footfall were impacted by storms and coronavirus fears last month, two new reports showed on Tuesday. Spending actually grew by 2.2% year-on-year in February, “propped up by digital subscriptions and takeaways, as people stayed at home to escape the storms and risk of contracting coronavirus,” according to Barclaycard.
But while spending overall was up, fears surrounding coronavirus impacted the retail sector particularly, with department stores hardest hit. They contracted 3.6% as shoppers avoided the high street. Fashion was down by less but clothing spend still dipped 1.7% as a result.
In fact, as many as 28% of Britons avoided physical shops as they worried about the possibility of being infected with the virus.
At the same time, spending on essential items rose by 1.6%, bolstered by supermarket and fuel expenditure, which grew by 1.3% and 2.5% respectively, with some irrational stockpiling being a factor in this.
People still seem to be upbeat though with Barclaycard saying confidence remains reasonably high, some 42% of UK adults feeling positive, up from 32% a year ago.
That said, 36% of UK adults remain careful with their money and more than half (54%) are worried about the rising prices of everyday items and how this will impact their ability to spend.
The Barclaycard report came at the same time as the latest Ipsos Retail Performance Retail Traffic Index (RTI) showed footfall figures at record lows in February with a 23% drop when compared to the previous month in non-food stores, and down 14.2% year-on-year.
This report varies from the Springboard study released a day earlier as it focuses on visits to stores rather than to overall destinations (like high streets, retail parks and malls).
Despite containing Valentine’s Day, the quietest week of the month was the seven days starting February 9. It represented the second lowest point ever measured by the the RTI.
Ipsos Retail Performance’s director of retail intelligence, Dr Tim Denison, said that for the past 14 years, February has been the month when average weekly footfall is at its quietest. But last month was “unprecedented”. The 23% drop was over twice as much as the average since the turn of the century. “This underlines the battering impact that storms such as Ciara, Dennis and Jorge have had on day-to-day life and retail businesses,” he said.
“For multiple retailers equipped with internet shopping capabilities, the sales ramifications may be cushioned, but for local independent stores, the wettest February on record will hit them hard,” he added. “In addition to the rain, the arrival of the coronavirus has twisted the knife still further this month. For retail destinations most attractive to Asian tourists, footfall was hit hard”.
And he’s worried about long-term effects. “While bad weather may come and go, we are simply unsure about the longevity and reach that Covid-19 will have on day-to-day life,” he said. “It may lead to local lockdowns which would damage domestic as well as tourist trade for months to come. It is ironic that just after Brexit is finally done, and consumer confidence enjoys a boost, another contagion hits the country.”
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