Britain’s high streets saw a drop in footfall last month as the rising cost of living, soggy weather and disruption to rail travel kept shoppers away- a first for July.
According to latest report by MRI Springboard, overall customer numbers in retail destinations declined by 0.3 per cent month-on-month. It was the first time that July has produced a lower figure than June since MRI Springboard began publishing its data in 2009.
High streets were hit most severely, with a month-on-month decline of 1.7 per cent, offsetting a slight rebound in retail parks, which were up by 0.7 per cent, and shopping centres, up 1.7 per cent. Even that was more subdued than in previous years, where the increase in shopper numbers from June to July has averaged 2.5 per cent.
Diane Wehrle, marketing and insights director at MRI Springboard, said: “July appeared to demonstrate the harsh reality of the impact of interest rate rises on consumers, combined with rain and a rail overtime ban on several days in the month.”
Wehrle said the greater impact on footfall in high streets was “in part likely to be due to the rain, as shoppers tend to gravitate towards either the covered environments of shopping centres or retail parks as they are easier to access by car”.
“There was also likely to be an additional impact on high streets caused by some employees opting to work from home on the days when rail overtime bans occurred,” Wehrle added.
The decline comes after consumer confidence fell for the first time in six months in July. The dip coincided with surging mortgage costs and financial markets speculating that there could be further aggressive interest rate rises from the Bank of England, and in turn retail lenders, in an effort to tame inflation.
Werhle warned that with the fourth quarter of the year looming and with many people’s annual holidays either paid for or already taken, “it is inevitable that consumers’ attention will now turn towards planning for Christmas spending, which may well dampen footfall further in the latter part of the summer”.
Wehrle said July’s figures also appeared to “demonstrate the harsh reality of the impact of interest rate rises on consumers, combined with rain and a rail overtime ban”.
It comes as Bank of England today (3) hiked its key interest rate for a 14th time in a row, by a quarter-point to 5.25 per cent as UK inflation stays high, prolonging a cost-of-living crisis. Policymakers “will continue to monitor closely indications of persistent inflationary pressures”, the BoE said in a statement following a regular meeting that sent borrowing costs to the highest level in more than 15 years.
“It is expected to fall significantly further, to around five percent by the end of the year, accounted for by lower energy, and to a lesser degree, food and core goods price inflation,” the BoE said. “Services price inflation, however, is projected to remain elevated at close to its current rate in the near term.”