Retailers in areas with high numbers of public-sector workers have experienced catastrophic declines in the number of shoppers in the past year as fear of unemployment has led to a marked tightening of belts.
Regional footfall figures for July published today by the British Retail Consortium (BRC) and Springboard reveal that Wales has been worst hit, with shopper numbers plummeting by 9.2 per cent in the past 12 months.
Shops in the West Midlands have also been hit hard with a 6.6 per cent decline in footfall, while numbers fell by 6.2 per cent in the East of England.
Reinforcing other economic data that suggests a growing divide between London's strength relative to the rest of the country is the fact that the capital saw shopper numbers rise by 1.2 per cent over the period. There were also small rises in the South-west – 0.4 per cent – and Scotland, with 0.2 per cent.
Stephen Robertson, the director-general of the British Retail Consortium, said the figures laid bare the sharp regional differences across the country. "This is the first time we've been able to publish footfall and vacancy figures in this level of detail and it shows stark differences in retail health between some of the UK's nations and regions," he explained.
"Generally, the parts of the UK where the public sector is a bigger proportion of the economy are the ones where customer spending is most likely to be hit by worries about job prospects and cuts, meaning people are shopping less and more retail businesses are failing. By both measures, Northern Ireland and Wales are suffering particularly badly."
The footfall figures chime with the decline in consumer confidence. Recent data from GfK NOP, for example, showed that sentiment had dropped over July to within striking distance of a record low. Its consumer confidence index fell by five points to minus 30 last month, well below expectations of a drop to minus 27, and only marginally better than the two-year low of minus 31 seen back in April.
The BRC data also showed that the national town-centre vacancy rate, encompassing both high streets and shopping centres, for May stood at above 17 per cent in Northern Ireland, compared with the national rate of 11.2 per cent. In Wales it was 13.4 per cent, while the North and Yorkshire figures were almost equally depressing at 13.1 per cent.
The overall footfall between May and July was 1 per cent lower than the same period a year earlier. On the bright side, however, that was an improvement on the fall over the preceding 12 months. Diane Wehrle, research director at Springboard, said the recovery could signal better news for retailers.
"Compared with the past three years, a drop in footfall of 1 per cent year-on-year is actually very modest and the decline has been steadily softening throughout 2011," she said.
The BRC's Mr Robertson agreed, noting: "For the quarter, the 1 per cent drop in shopper numbers compared with this time last year is not great, but [it] is actually an improvement on the 1.3 per cent fall over the 12 months before that."
There has also been a shift in activity between different types of shopping areas. "Traditionally, retail parks and malls outperformed the high street due to ease of access and free parking," Ms Wehrle said. "However, these areas are now experiencing similar challenges to town centres."
She added: "If the trend identified this year continues into 2012, there is a real chance that footfall levels in high streets could stabilise next year."Reuse content