19th Dec 2022 18:17
(Alliance News) - Retailer were amongst the worst performer in London on Monday as data from retail traffic counter Springboard revealed that UK retailers are braced for a subdued last few days in the build-up to Christmas.
"The latest figures suggest the UK's winter of discontent is impacting high street footfall," said Danni Hewson, financial analyst at AJ Bell.
"Arctic temperatures will also have played a part in keeping people out of shops in what should be a busy Christmas trading period. Retailers are having to endure a triple whammy of cautious consumers, rail disruptions and concerns that online orders might not make it in time for the big day because of postal strikes," Hewson explained.
Analysts at Springboard said the month-to-month declines in footfall from September to November, followed by just a modest predicted rise this month, would eradicate the gains made over much of this year.
It said the number of visitors to UK high streets was down by a fifth on pre-pandemic levels last week, and almost 1% down on last year when the Omicron variant loomed.
Diane Wehrle, insights director at Springboard, said footfall would rise in all three destination types - high streets, retail parks, and shopping centres - from November to December, although would be "more subdued than in previous years".
Susannah Streeter at Hargreaves Lansdown blamed this on the various strikes happening across the country this festive period.
"The latest wave of strikes is set to put a dent in online sales with warnings from retail bosses that Royal Mail walkouts mean they can't guarantee deliveries, and other delivery firms like Evri struggling under the pressure. It's unlikely bricks and mortar stores will offset the drop in online demand given strikes by rail workers are also disrupting travel into town and city centres," she said.
Retailers Next, JD Sports and Frasers finished 1.7%, 2.1%, and 0.9% lower, respectively, in London on Monday amid the downbeat data.
The news comes after retail sales in the UK unexpectedly fell in November against the previous month, according to data released by the Office of National Statistics on Friday.
Retail sales volumes were estimated to have fallen by 0.4% in November, after a revised 0.9% rise in October. Market consensus, as cited by FXStreet, had expected a 0.3% increase in November.
Compared with the same period a year earlier, retail sales volumes fell by 5.9% in November. The market had expected a 5.6% fall.
As a result, CMC Market's Michael Hewson said there is rising concern amongst investors that we could see "further warnings on profits when we get the latest retail trading updates at the beginning of January."
Susannah Streeter at Hargreaves Lansdown was more optimistic, however: "Brighter spots should emerge for luxury goods companies, which are more insulated from cost-of-living headwinds, particularly once winter Covid waves have passed in China."
China has been a significant buyer of luxury goods over the past decade, so pandemic restrictions in the country have hit retailers hard. With an easing of the rules in the nation, however, it's hoped consumer confidence may finally bounce back next year and the "high spending Chinese tourists will go globe-trotting once more," Streeter argued.
By Heather Rydings, Alliance News senior economics reporter
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