Shoppers put brakes on recovery predictions
Expectations that consumer spending will lead the UK’s economy to full health were tempered on Monday by data showing Britain’s shoppers shunned the high street as household finances deteriorated at their sharpest pace in more than six months. Retail footfall registered its worst performance since the start of the year in the three months to October, according to figures from the British Retail Consortium, while Markit’s index of household finances for November slipped to its lowest level since April.
The household finance index, which measures perceptions of financial wellbeing, fell to 38.8 – well below the crucial 50 figure that marks an improvement in conditions. Those polled said a tighter squeeze on their cash was dampening their appetite for big purchases. Tim Moore, of Markit, said: “November’s survey highlights yet another setback for household budgets as weak pay trends and energy price rises appeared to overshadow recent positive news about labour market conditions.” The British Retail Consortium and data firm Springboard reported a 2.9 per cent drop in footfall last month, compared with October 2012. Over the three months, footfall was down by 2.1 per cent. The number of visitors to the high street fell more sharply than in shopping centres or out of town retail parks; the data recorded a dip of 3.6 per cent, compared with 2.9 per cent and 1.2 per cent falls. Diane Wehrle, retail insights director at Springboard, said the performance of out of town retail parks was “clearly the result of the recorded demand for leisure, household and games products”. According to the data, just over 11 per cent of retail space in the UK’s town centres is empty. Vacancy rates are worst in Northern Ireland, where almost a fifth – 18.5 per cent – of shops are empty, and Wales, where the figure is 16.7 per cent. In Greater London, 6.6 per cent of shops are empty. Helen Dickinson, director-general of the British Retail Consortium, said: “Although the proportion of empty shops in the UK is unchanged, it’s again masking widespread variations.” Ms Dickinson added: “Despite the tentative optimism in the air, it’s clear that conditions remain challenging. Retailers will be hoping that a festive boost to browsing and buying puts things back on a more even keel over the coming months.” Some better news came from department store John Lewis, which reported that sales had topped £100m for the first time this year last week – the earliest week on record. The onset of cold weather boosted sales of boots and slippers, along with hot water bottles, ear muffs and tumble dryers. Online sales were up almost a quarter on last year, accounting for 31 per cent of sales.