TOP JULY 2024 City Centre Retail Spend Insights.

HOPES FOR A POST ELECTION REBOUND IN SPENDING DURING JULY WERE DISAPPOINTED WITH SALES ACROSS TOWN AND CITY CENTRES DURING JULY -9.3% BELOW JULY 2023. 

According to Diane Wehrle, of Rendle Intelligence and Insights & Beauclair’s Brand Ambassador.  

This decline is particularly acute given the rise in spending in July 2023 of +1.1%.  The data also reveal that the vast majority of the reduction in spending in July this year was driven by fewer customers making purchases, with transactions down by -7% and customer numbers down by -6.4% on July 2023.  Consumers also spent less per transaction, however the drop in the ATV was less severe at -2.5%.

The annual decline in spending was comprehensive across all ten sectors.  The largest drop in spending from July 2023 occurred in Entertainment (-19.3%), Fashion (-11.9%) and Household Goods (-31.3), the drop in Household Goods spending being a continuation of a long term trend for a pull back on spending on big ticket items.  In contrast, Grocery spending – a necessity – dropped annually by just -2.6%, with the number of transactions on par with July 2023.

Reduced spending in towns and cities last month can’t be blamed on the weather.  Whilst conditions in July were variable, with relatively cool weather at the beginning of the month, just as most schools broke up for the summer holiday we had a mini heatwave later in the month with hot and sunny weather for a number of days.

The disappointment is likely to be heightened following recent reports from GFK and PWC of an improvement in consumer confidence – which generally provides a catalyst for stronger spending – and latterly a 0.5% reduction in interest rates. 

So what has driven such a disappointing result for our town and city centres?  Well, firstly we need to allow for a “lag” time between an increase in consumer confidence and the ability of consumers to actually spend – many households are likely to have drawn on savings and reserves whilst inflation was high and are now conscious that they need to replenish this buffer, leaving additional high street spending a poor second.  Secondly, whilst interest rates have dropped marginally, for many households it won’t kick in immediately and a large number of households are still facing a significant rise in their mortgage payments over the next few months as their existing mortgage terms end – whilst half a percentage point is helpful it is not transformational.  Lastly, with just six weeks to go before the children are back at school for the autumn term, with the long run into Christmas, it’s likely that many consumers are prepared to “make do” in order to preserve their Christmas budget. 

A further factor that needs to be included in the mix – although it’s heartbreaking to have to do so – is the possible impact of the initial days of rioting that occurred in the last week of the month.  We know that over the three days from Monday 29th July to Wednesday 31st July footfall into stores in England (Sensormatic) averaged -7.8% down year on year, and by as much as -19% over the three days in individual cities. This will inevitably have hit high street spending in July to some degree, as we know that footfall is a precursor to spending.  With the riots escalating into August, which at the time of writing do not seem to be abating, we will need to brace ourselves for a continuation in the downward slide in high street spending over the next month.

Upcoming webinar - Golden Quarter 2024 Beauclair Spending Predictions

Join our expert and ambassador, @Diane Wehrle, as she shares exclusive insights into consumer spending trends for the upcoming festive season. 🎄

Click the link to sign on today. https://zoom.us/webinar/register/WN_DJ5UYb56TGKEoBpKTWohhA#/registration