Cost of living delivers “sharp shock” to retail as UK footfall slumps in March

The long-awaited impact on households of the cost of living crisis delivered a hammer blow to UK retail destinations in March 2023, dropping -2.8% compared to February, versus a rise of 9.4% from January to February 2023.

Covering the five weeks from 26 February - 1 April 2023, new data from retail analysts MRI Springboard shows that shoppers have started to rein-in on leisure-based trips, as footfall in UK high streets widened to -18.7% compared to pre-pandemic 2019 levels, and was down -0.6% compared to March 2022.

It is the first time MRI Springboard has recorded a month-on-month decline since publishing data in 2009, except for the ‘Beast of the East’ impacted 2018, and 2020 when the UK went into full lockdown.

Other key findings include:

• The gap in footfall across all UK retail destinations widened in March to -14.9% from March 2019, compared to -12.5% in February. While it was -18.7% in high streets, footfall was also down -17.8% in shopping centres and -3.4% in retail parks compared to March 2019.
• Footfall fractionally increased annually in March 2023 from March 2022 by +0.7%, the smallest year on year uplift since the start of Covid, versus annual increases in February 2023 of +11% and +10.7% in January.
• At least some of the reduction of footfall in March is likely to have been a consequence of consumers deferring trips to Easter, when MRI Springboard forecast that footfall will be 5.1% higher than in the week before. However, footfall over Easter 2023 is still expected to be just +5.4% higher than over Easter 2022.

Diane Wehrle, Insights Director at MRI Springboard, said: “March delivered a sharp shock to UK retail destinations with a decline in footfall of -2.8% over the month from February to March, a result that had not been anticipated following an increase in February that more than matched the result for February in previous years.

“These results demonstrate that consumers are clearly starting to feel the impact of the cost-of-living crisis. Higher inflation and interest rates and the end of the monthly energy bill rebate, all coincide with the need for consumers to plan for Easter and the summer in the face of a dwindling savings pot amassed by many during the pandemic. This inevitably means that a far greater degree of cautiousness is being exhibited.

“For many consumers a period of austerity has started, with the driver of trips now being essential spending rather than experience as many consumers rein in leisure-based trips to destinations to reduce their spending.

“Indeed, the evidence of this is clear from an annual decline in footfall of -1.4% across UK high streets at the weekend – the first month ever this has occurred - versus rises of +19.8% in February and +9.5% in January.”