Retail Briefing: Striking for Christmas to Cost £1,500m+ December 2022
The Centre for Retail Research estimates the cost of the rail and postal strikes to bricks-and-mortar retailers nationally will be £1,500m for the pre-Christmas period and a further £850m-£1,000m for the January sales.
Background. The position of many high-street retailers has been gloomy for some years. Added to the intense competition from online shopping comes the pandemic, store lockdowns, customers frightened to enter stores, told not to touch anything, you must do this, you must enter by that door and leave by this one, etc etc. The year 2022 was supposed to mark the recovery of UK bricks-and-mortar retailing as shoppers flocked back to high-street stores. It was certainly like that for the first three months, although many shoppers have not returned. Customer footfall is still 10% or so below 2019 figures, except in smaller shopping destinations like Doncaster and Blackpool. In food, customers have been spending less since April 2022. In non-food they have been buying less since May-June 2022. Further details can be found at the end of our Retail Forecast 2023-2024.
Customer anxiety. Shopper concerns now (December 2022) revolve around price rises, the cost of energy, increased food prices and a sense of gloom as bad news follows bad news. A recession has already started and should last through to at least the end of 2023, unless the Ukraine War is ended.
A series of public-sector strikes on the railways going back six months has hit retailing, particularly London and other large cities. For Christmas, shoppers are unable to organise a shopping trip by train involving an overnight stay, a meal at a nice restaurant and the theatre. Workers unable to go to offices in large cities are working from home more, hence they are not taking time to do some shopping, visit ot pub or a restaurant.
Online retailers are also being hit by the postal stoppages, which should cost them about £250m in lost revenue. Ordered goods, vouchers, Christmas cards will not be delivered before Christmas. Small artisan businesses, producing cards and gifts for Christmas have probably lost between one-third and one-half their expected sales.
On the plus side, more people are visiting destination stores to buy their Christmas gifts, even though footfall still remains lower than December 2019. But shoppers are buying more goods instore than in 2019. This has benefited the smaller regional centres such as Norwich, Nottingham, Skipton, Stratford-on-Avon and Guildford.