Tel: +44(0)1535 272861

Email us

    The Valley Group

    Retail marketing group creating powerful in-store solutions, driven by insight, knowledge and creativity

    Why A Strong Winter Sale Is Important For The UK High Street.

    Viewpoint Lite | 11/01/22

    Traditionally, Winter Sales on the high street always bring the ‘Golden Quarter’ to a close, delivering much needed turnover for retailers at the expense of their profit margin. This years sales are unique, due to the fact that these are the first ‘proper’ winter sales since the global pandemic took hold in 2020 – last year’s winter sales in physical retail were, curtailed by the third national lockdown.

    This year’s winter sales got off to a strong start. With many retailers starting their offers early, pre-Christmas and with many offers ‘switched-on’ in the weeks leading up to Christmas, post black-Friday. Uniquely, footfall increased by 5% in the week between Christmas and New Year, an uncommon event. Dial back to 2019 (pre-pandemic) and footfall declined by -9% for the same period, so why the change? Were consumers cautious (due to omicron) before Christmas, but were motivated by ‘up to 70% discounts’ to visit physical retail post Christmas? On New Years Eve in London, retail footfall experts Springboard, reported that High-street footfall surged by +54.8% versus Christmas Eve? Had consumers shopped early for Christmas and didn’t need to make last minute purchases and stayed home to start the festivities?

    In some cases the footfall was driven by consumers returning or exchanging Christmas gifts, though on the whole consumers enjoy the social aspect of shopping and hunting for a bargain.

    However, the initial positive footfall growth was followed by a -6% decline in the first week up to the 8th January, and compared to 2019 it was down -21.8% for the same period. Clearly, continuing consumer caution of the omicron variant and the continuing ‘work from home’ guidance is degrading the volume and quality of footfall.

    During this challenging time, the fortunes of many retailers are shaped by two things, footfall and profit margin – not to mention an important requirement to clear through stock without further reductions damaging profit margins, to make way for full price, high margin, seasonal newness.

    Will poor, or low quality footfall have a damaging effect on some retailers this year? In recent years many retailers have announced profit warnings, or worse gone into administration, due to a weaker than expected Golden Quarter. Will any of our much-loved high street retailers be affected this year? Last year, one notable casualty post 2021 Winter sales was TOPSHOP – although the challenges that contributed to their demise can be charted back many years.

    At a time when consumers are becoming more cautious with their shopping decisions, they are in turn becoming more efficient with the stores they choose to shop with and how they shop. Following a strong Christmas period for the ‘big grocers’ in food and non-food categories, and the continuing growth of online sales. The consumer is able to get their essential and non-essential shopping needs with ease. However this continuing trend takes them away from physical retail.

    At the moment the odds seem pretty stacked against retailers being able to trade through the final weeks of the golden quarter with commercial efficiency. Weekly footfall reports will inform a judgement that retailers must be struggling due to weaker than hoped footfall, which will manifest itself in further margin hitting reductions.

    2022 must be a transformative ‘recovery’ year for physical retail, with many established brands and retailers evolving their retail proposition to focus on and deliver experience and new retailers starting to take important space on the high street.

    After a bargain? Invested in the future of physical retail? Make sure you head onto the high street and make a purchase or two!

    Cookies

    This website uses cookies. You can read more information about why we do this, and what they are used for here.

    Accept Decline