Britain’s decision to break up with the European Union has already taken its toll on the country’s retailers.
Footfall was 2.8% lower than last year in the five weeks ended July 2, according to the latest BRC-Springboard Footfall and Vacancies Monitor, released Monday. That drop was the sharpest decline since February 2014. Not to mention, a massive turn of events following May’s 0.3% rise.
In fact, footfall deteriorated from a 0.4% increase in the first week of the month to a 4.6% decline during the week of the referendum, which took place June 23, followed by a 3.4% fall in the wake of the result.
Despite June being the 38th consecutive month of deflation in the U.K., high streets (-3.7%), shopping centers (-2.3%) and retail parks (-1 percent) all experienced falling foot traffic throughout the month. Retail parks in particular recorded their worst monthly performance since November 2013.
“Retailers continue to focus relentlessly on delivering for shoppers day in, day out, and they know that providing a great in-store experience is key to driving up footfall. Although there is a level of uncertainty, it is important that this doesn’t deter us from the shopping and leisure activities we all enjoy,” Helen Dickinson, chief executive at the British Retail Consortium (BRC), said Monday. “The EU referendum will not have changed the in-store experience for customers and, crucially, the price of goods on the shelves. Now is a great time for shoppers as the summer sales begin in earnest following on from a record 38 months of falling shop prices.”
On a regional basis, the data showed that footfall was up 0.9% in June, improving on the 0.8% increase in May. But all other U.K. countries and regions experienced a decline, with the West Midlands, Greater London and Scotland each witnessing the sharpest drop-off.
“The results are shaped by a political and economic storm against a backdrop of rain downpours and generally inclement weather throughout the whole month,” said Diane Wehrle, marketing and insights director at Springboard, calling the results “unsurprising.” “Whilst the cooler more rainy weather than last year will explain some of this degradation in performance, it is unlikely that it will have accounted for all the 5 percent drop in footfall of across U.K. destinations in the seven days post the referendum.”
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Most significant, she said, was the out-of-town footfall decline.
“It is more likely that consumers’ attention was diverted in the immediate aftermath—the issue for retailers is how quickly shoppers will return to their usual patterns of behavior,” Wehrle added.
Dickinson echoed this sentiment. “June has seen many distractions from Euro 2016 to Wimbledon so heading out to the shops seems to have slipped down the priority list for many. In the coming months we all must redouble our efforts to remind customers that now is a great time to get out into their local communities,” she said.