Good news for high street shops as footfall increases

According to MRI Springboard, the three bank holidays in May boosted shoppers’ footfall across the UK, with a +1.1% rise from April. High streets drove the increase: +3.6% versus drops in shopping centres and retail parks of -2.2% and -0.9% respectively. 

High street footfall also rose by +9.2% from 2022 over the early May bank holiday, and there was a greater degree of consumer resilience in the month than envisaged.

This spells good news for independent retailers over the summer as shoppers feel more confident returning to the high street and enjoying the sunshine. 

How did the extra May bank holidays boost the UK economy?
Shoppers chose to spend their trio of May bank holidays venturing into local town centres and indulging in dining out. 

As Diane Wehrle, insights director at MRI Springboard, explained, “With three official bank holidays, May 2023 was a unique month in the retail calendar, and it appears that it provided a further boost to retail stores and destinations.

“The stronger performance of high streets during what was a period of public holidays is likely to reflect their wider hospitality offering. 

“As domestic essential food prices continue to soar, and more hospitality operators offer discounts and vouchers, dining out is becoming more appealing as it can be seen as a more cost-efficient option for families; 27% of consumers dined out at least once a week in May, rising from 21% in February and 18% in November 2021.”

The figures in May were good for food retailers and much needed after a cold and late Spring. According to Andrew Goodacre, CEO of the British Independent Retail Association (BIRA), “As we approach summer, we hope that the footfall figures continue to improve. We can see that high street footfall has been outperforming other locations, a real indication that shoppers still prefer local shops on their high streets.”

Capitalising on the high street boost
Independent high street shops have a key opportunity here to continue the momentum into the summer. Martin McTague, national chair at the Federation of Small Businesses (FSB) added, “Retailers can capitalise on the warmer weather by continuing to offer consumers a blend of quality, freshness and personal touch that is unmatched by larger outlets. 

“Leveraging local produce, seasonal specialities and culturally themed food events can enhance the shopping experience and keep footfall momentum going. It’s not just about selling products, but also about building relationships and becoming the hub of the local community.”

What can the government do to support Britain’s high streets?
Despite a positive outlook for the summer, government intervention is still needed to help independent businesses recover and thrive from Covid-19 and the cost-of-living crisis. 

According to Martin, “It’s crucial the government creates more measures to further support these vital elements of our high streets. Increasing the Small Business Rates Relief (SBBR) threshold to £25,000 is a great way to support new and well-established firms. Raising the VAT threshold from £85,000 to £100,000 could also spark growth, as currently many tourism firms halt trading near the end of the tax year to avoid hitting the current limit and incurring additional costs.

“Transport also needs to run smoothly, with the government ensuring its Pothole Fund is fairly allocated. Parking must also be accessible on high streets, with tourist hotspots increasing park and ride services. Local Visitor Economy Partnerships should also come up with plans that are fully reflective of small business interests.”

Andrew agreed, “Retailers cannot do it alone and the government must start to focus on economic growth and re-building consumer confidence. Talk of even higher interest rates and mortgage costs is unsettling at a time we need consistency and stability.”

For the food retail sector to truly recover, Mark Lynch, partner at corporate finance house to the consumer industries, Oghma Partners, sees government intervention to bring down inflation as crucial.

“For food inflationary pressures to be fully flushed out of the system we will need to see a reduction across the board in raw material costs. The UK has, unfortunately, shot itself partly in the foot through Brexit combined with the limited support given to various agri-sectors to increased energy costs. The impact of these supply side constraints can be seen in pork prices, egg availability, and cost including UK fresh produce supply and pricing”, he explained.