Alan Monahan writes: They’ve been wrong in the past, but I’m hoping that the people at retail intelligence firm Springboard get it right this time when they predict that Easter is set to meet expectations as the most anticipated weekend for retail after Christmas.
Springboard forecast UK footfall to increase +5.4% compared to the same trading days last year. The bold prediction comes as it announces that footfall rose +1.2% in March year on year, breaking the six-month consecutive decline in what has been a challenging environment industry-wide.
Springboard insights director Diane Wehrle says that due to the timing of national payday before Easter, mild spring weather and the continued trend for consumer spending focused on leisure and hospitality trips, it expects this Easter to outperform the last when footfall dropped -1.9% overall, year on year.
However, she cautions that the key drivers of consumer spend, confidence and inflation, have worsened over this first quarter from Q1 last year, which is likely to be constraining shoppers’ willingness to fork out for retail goods.
Springboard believes most of Easter’s increase will derive from uplift in footfall on the high street, predicted to increase +8.8% year on year over Easter weekend. The performance of high streets over Easter is a reflection of their resilience over the year to date – their adaptability and diverse hospitality offering means they are able to expand and respond to trends more quickly than retail parks and shopping centres.
The footfall in retail parks is forecast to increase +3.5%, with the anticipated spring weather highly likely to encourage DIY and garden purchases. In contrast, Springboard believes shopping centres will see a rise of just +0.1%, this weakened performance “due to their inflexibility as a retail destination to respond to shoppers’ fast-changing needs and as a result, the little investment in their upkeep, diversity and offering”.
Historically, 25% of bricks and mortar sales over Easter are made in fashion retailers, with only 10% being made among food and beverage outlets. However, this year Springboard forecasts sales in food and beverage to increase to 15% of the total, with a drop in sales in fashion to around 20%. This is due to more conservative consumer spending on retail goods and increased preference for spending on experiences.
Ecommerce data specialist PCA Predict forecast online transactions will rise by an average of +17% over the three Easter trading days, with the greatest increase of +20% expected for Easter Monday.
Traditionally, it’s one of the busiest days of the year for online shopping and this year is expected to be no different with transactions via mobile seeing a 10% increase on the same time last year as consumers become more accustomed to purchasing via their mobile devices.
“With good weather in sight, it is likely that mobile shoppers will continue to make purchases out in the sunshine via smartphone or tablet, “ says Chris Harle, PCA Predict’s COO “However with British spring time such a difficult period to predict no one can say for definite whether April showers will encourage people to stay indoors. We are also likely to see consistent mobile usage throughout the day, including over the dinner table, with few dramatic spikes.”
Meanwhile UK retail sales decreased by 1% on a like-for-like basis from March 2016. British Retail Consortium chief executive Helen Dickinson observed that the BRC-KPMG figures were initially “underwhelming”, with the first decline since August last year. However, last year’s early Easter caused a distortion and the later timing of the holiday this year detracted from last month’s performance.
Mother’s Day gift purchases provided some compensation, boosting sales of beauty and stationery items in particular. But looking at the bigger picture the slowdown in non-food growth persists and it now stands at its lowest three-month average for nearly six years.
Paul Martin, UK head of retail at KPMG, rightly says that the new tax year will see further pressure on margins in the form of the apprenticeship levy and business rate changes. Tighter cost management and a focus on efficiency therefore becomes more important than ever.
All that said, I wish you strong sales this weekend and a very happy Easter.
