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Black Friday deals helped improve shopper footfall in November but depleted consumer confidence could prove a drag on Christmas trading, the British Retail Consortium warned.
The latest BRC-Springboard footfall & vacancies monitor showed that footfall increased on average by 0.2% year-on-year, an improvement on the figure seen for November 2016 (-1%). It ended four straight months of decline in shopper numbers.
Of the three shopping locations, shopping centres were the poorest performers, growing in South West and Wales only. High street showed positive growth for all but three regions: Greater London, Northern Ireland and South West. Retail parks continued to show growth, but at a decelerated rate of 0.3% compared with 1.8% six months ago.
BRC chief executive Helen Dickinson sounded a warning for retailers on conditions for the all-important Christmas period.
“November saw a slightly improved picture for shopper footfall as retailers enticed customers with early deals in the lead up to Black Friday,” she said.
“Though very welcome after four consecutive months of decline, the month’s growth in footfall is unlikely to signal a reversal of the longer term trend. As price increases for food continue to eat into household finances, consumer spending power for discretionary non-food items will inevitably weaken.
“So a cautious consumer may sap some of the sparkle from this year’s Christmas trading, which means retailers are going to have to compete even harder for customer spend, which is always good news for consumers.”
Another indicator of consumer spending also released today pointed to continued hard times for the high street. Spending declined for the third consecutive month in November and is on track for the worst performance in five years, according to the Visa consumer spending index. Household expenditure fell by 0.9% on the year last month, with most sectors recording lower spending.
Diane Wehrle, Springboard marketing and insights director, added that Black Friday may have just shifted Christmas spending forward and that she expected footfall to be further challenged in December.
Morning update
Sausage casings manufacturer Devro CEO Peter Page is to step down after 10 years with the group. Group finance director Rutger Helbing will take over from Page after the business announces its full-year results at the end of February. Page will continue to work with Devro in an advisory capacity to support the transition. A search for Helbing’s successor has started.
Devro chairman Gerard Hoetmer said: “Peter has made a huge contribution to Devro during the last 10 years, turning the company into one of the world’s leading suppliers of collagen casings for food, with a network of world-class manufacturing facilities.
“He will leave with our best wishes and we wish him every success with the next steps of his career. We are delighted to have someone of Rutger’s calibre to succeed Peter and we are happy that, after having worked together for almost two years, there will be a smooth transition of leadership.”
A healthy start to the week as the FTSE 100 rises 0.5% to 7,434.22 points this morning.
British American Tobacco (BAT) starts the week 1.4% up at 5,010p, with Ocado (OCDO) also up 1% to 359.4p and Unilever (ULVR) registering a 0.9% increase to 4,219p.
Booker (BOK) and Tesco (TSCO) are also among the early risers, up 0.5% to 226p and 0.4% to 205.5p respectively.
SSP Group (SSPG) has slipped 0.5% to 658p this morning, joined by Imperial Brands (IMB), down 0.2% to 3,078p and Sainsbury’s (SBRY), down 0.1% to 244.4p.
This week in the City
Tomorrow morning kicks off with the latest Kantar/Nielsen grocery sales figures. The Consumer Prices Index for the past month will also be released tomorrow.
Ocado releases its fourth-quarter trading update on Thursday, hoping to continue the momentum delivered by the tie-up with French retailer Casino. Thursday also brings the latest Bank of England and ECB interest rates decisions, as well as the ONS Retail Sales figures for November.
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