High street retailers faced significant challenges this Boxing Day as preliminary footfall figures indicate substantial declines across various UK shopping destinations. According to data compiled by MRI Software, footfall on Britain's high streets fell by 9.6% compared to last year, and shopping centers reported a 5.1% decrease.
Overall, retail activity across all UK destinations dropped by 7.6%, raising concerns among retailers who hoped for post-Christmas sales to provide relief amid economic pressures. The dramatic downturn is particularly stark when juxtaposed with pre-pandemic levels, where footfall was down 20.5%, leaving many retailers reeling from the disappointment.
Jenni Matthews, marketing and insights director at MRI Software, underscored the situation, noting this year's decline was markedly different from the previous year when footfall actually increased—an anomaly she suggests may be attributed to the cost-of-living crisis. "This could be reflective of the shift in consumer behaviour influenced by the continuing cost-of-living crisis," Matthews stated. With many shops closed—like John Lewis and Marks & Spencer—consumers found fewer options for impulse shopping on the significant retail day.
The economic climate had already set consumer expectations low, and analysts say the enduring cost-of-living pressures have redefined shopping patterns. Besides, many retailers opted to begin their sales online, often launching promotions on Christmas Day, making physical store visits less of a priority for many consumers.
Kien Tan, senior retail advisor at PwC, highlighted another important trend: "Lots of shops are now closed on Boxing Day. It used to be just John Lewis, but now Next, M&S and most big supermarkets close." This new norm significantly impacted foot traffic traditionally expected on this retail-centric day.
Despite the discouraging news on Boxing Day, early reports indicate some recovery as footfall increased by 8% across UK retail destinations on the following day, December 27th. "Shoppers are shaking off their post-Christmas slumber," Matthews observed. She added, “Following the subdued start to the Boxing Day sales, this uplift is promising for retail stores and destinations.”
The returns demonstrate consumers were still eager to hunt for discounts or restock after the festive celebrations. The rise was particularly notable on high streets, observing increases of 8.7% year-on-year. Retail parks and shopping centres also reported upturns, supporting the notion of delayed shopping across retail formats as consumers aimed to capitalize on post-Christmas sales.
While the initial Boxing Day sales might have represented low enthusiasm from shoppers, the subsequent uptick offers some hope as retailers gear up for the New Year sales and beyond. Yet, the threats facing retailers remain considerable. According to data released by Begbies Traynor, the proportion of retail businesses classified as being in “critical” financial distress rose 25% to 2,124 over the last three months of 2024.
The challenges stemming from rising operational costs, inflation, and shifting consumer confidence could hamper long-term recovery efforts, making clear the road forward may be fraught with difficulties. Julie Palmer, a partner at Begbies Traynor, remarked on the persistent pressures retailers face, which include squeezed consumer spending and rising costs: “Even for more resilient businesses, the pressures remain relentless, and many will likely face financial challenges next year as they navigate these compounded difficulties.”
Giving insight on the retail sector's future, Matthews also remarked, “We've got to bear in mind… things have stabilised, we’re almost back to what we saw pre-pandemic.” With the holiday season having yielded mixed results, it highlights the necessity for retailers to recalibrate their approaches as they adapt to the ever-evolving marketplace.
The Boxing Day slump, coupled with the gradual recovery experienced immediately after, paints the picture of retail's current battlefield: one where traditional practices are challenged, and adaptability may yet prove the defining factor for the success of retailers hoping to see brighter days as 2025 approaches.
