To say that the current retail environment is challenging is a huge understatement. Having been closed for nearly three months, most bricks and mortar fashion retailers only reopened a few weeks ago. Many non-essential retailers were closed for 12 weeks during the peak Spring trading period. This makes predictions for the rest of this season and the autumn/winter season very difficult.
Footfall has dropped off a cliff at only about a third of the level pre lockdown. There are no current figures for Ireland but Springboard, a UK data company released footfall figures for the first weeks of trading since shops have opened there. According to a Guardian article on the figures:
“overall footfall including high street, shopping centres and retail parks fell by 57% in June 2020 compared with June 2019. The decline was sharpest on high streets, down 65%.
Consumers had more confidence to return to retail parks in the month from 31 May to 4 July, where footfall was 32% lower compared with the same period in 2019. In shopping centres footfall declined by 62%.”
Anecdotally, the same trend is happening on this side of the Irish Sea. With many workers continuing to work from home, towns and city centres are quieter than usual. On a train to the west last week I noticed that all the station car parks in Kildare were empty, where usually they would be full on a weekday morning. There are many factors to account for this:
- Shopping as a leisure activity has not yet made a comeback. “Coronavirus has turned retail therapy into retail anxiety” Consumers are nervous about shopping despite the efforts of retailers to assure them that they have taken all necessary precautions.
- With restrictions on pubs, restaurants and other social activities in place there was no incentive to buy the new outfit to go out on Friday night or to the Saturday party. Whilst restaurants and coffee shops are operational, the health and safety precautions have changed the customer experience.
- Occasions such as first communions, confirmations, weddings and baptisms were postponed with the resulting impact on the fashion industry. These are traditionally events where consumers could be expected to spend more money on an outfit and to buy new clothes for several family members at one.
- Most people have cancelled or postponed their foreign holiday this year, usually a good source of sales for high season merchandise.
In light of this situation historical information is of little use in guiding decision making. It remains to be seen if people will return to shopping as a way of spending leisure time to the extent that they did before Covid.
Retailers should hope for the best, but perhaps prepare for the worst.