Diane Wehrle, Beauclair’s Brand Ambassador, suggests UK retailers and high streets have cause for cautious optimism for spending over Q4 and Christmas 2024. Analysing our Beauclair data, Diane forecasts that over the three months from October to December spending across UK high streets will be +2.3% higher than in the same three months in 2023.
- Spending in UK high streets is forecast to rise by +5% from September to October, +9% from October to November and by +33% from November to December
- An exceedingly challenging trading landscape in 2023 with high inflation and rising interest rates impacted household budgets was reflected in a drop in spending in high streets in Q4 2023 that averaged -3.7% (-4.9% in October, -2.2% in November and -4.1% in December).
- The forecast increase in spending in each month of Q4 this year will lead to annual increases in each month; +3% in October, +1.5% in November and +2.5% in December.
- 5 key retail sectors account for 85% of spending in UK high streets, and forecast increases in spending will not be spread evenly across these sectors.
- Food and Drink and Health and Beauty are forecast to continue to increase annually in Q4 (Food and Drink by +4.2% and Health and Beauty by +2.4%) following increases in 2023.
- Fashion spending is forecast to increase by +3.8% versus a drop of -7.1 in Q4 2023.
- Spending in the General Retail sector (which comprises department stores and bookshops) is forecast to remain largely static (-0.2% from Q4 2023)
- It is forecast that Grocery spending on the high street will rise marginally (+0.6%) as any uplift will be directed towards larger out of town food stores.
- 81% of consumers are expecting to spend the same amount or more than last year shopping for gifts in shopping centres/high streets – an increase of +11% from 2023.
Rendle Intelligence and Insights and Retail Destination Expert has released its forecast for spending across the UK’s high streets over Q4 2024.
Analysing data from Beauclair, Diane Wehrle, CEO of Rendle and a retail destination expert, forecasts that over the three months from October to December spending across UK high streets will be +2.3% higher than in the same three months in 2023.
The forecast annual uplift from 2023 is driven by expected increases in domestic spending each of the three months in Q4 from the month before. Rendle is forecasting a rise in spending of +5% from September to October, +9% from October to November and by far the greatest rise from November to December of +33%. This reflects spending patterns in both 2022 and 2023 where there were single digit rises in spending from the month before in both October and November, with a greater increase from November to December in both 2022 and 2023; +35% in December 2022 and +34% in December 2023.
Comparison of the forecast spending in each month in Q4 with spending in the same months in 2023 demonstrate an annual uplift in spending from 2023. It is well documented that Q4 2023 was an exceedingly challenging trading landscape with high inflation and rising interest rates that impacted household budgets. Consequently, there was a drop in spending in high streets in Q4 2023 that averaged -3.7% (-4.9% in October, -2.2% in November and -4.1% in December). The increase in spending in each month of Q4 this year will lead to annual increases in each month; +3% in October, +1.5% in November and +2.5% in December.
However, these rises will not be spread evenly across all retail sectors. Five sectors are key to driving high street retail spending, with 85% of total high street spending emanating from Fashion, Food and Drink, General Retail, Grocery and Health and Beauty. Spending in each of these five sectors over Q4 2024 will vary, reflecting both changes so far this year, and also current trends in consumer spending, with a greater priority amongst consumers for spending on leisure and self care. This has led to stronger results in the Food and Drink and Health and Beauty sectors than Fashion, and was evidenced by the spending results for Q4 2023 when spending on Food and Drink rose by +1.6% from 2022 and spending on Health and Beauty dropped by -0.4% from 2022 whilst spending on Fashion dropped by -7.1%.
In Q4 this year we are anticipating that spending on Food and Drink and Health and Beauty will continue to increase annually (Food and Drink by +4.2% and Health and Beauty by +2.4%), but we are also anticipating that Fashion spending will increase by +3.8%. Spending in the General Retail sector (which comprises department stores and bookshops) will remain largely static (-0.2% from Q4 2023), as this sector is the most vulnerable to online spending (Beauclair identified that two thirds of household spending the General Retail sector is online), and there are far fewer department stores trading on UK high streets. It is forecast that Grocery spending on the high street will rise marginally (+0.6%) as any uplift will be directed towards larger out of town food stores.
This forecast is for spending from UK bank accounts, and therefore, spending from overseas visitors will provide a further boost over this three month period. At the same time, the removal of tax free shopping for overseas visitors that came into force in January 2021, is likely to mean that a proportion of much needed spending is diverted to other European destinations, particularly spending on higher value items.
Diane Wehrle said “With the UK savings ratio at the highest level since 2021, it is clear that consumers have used 2024 to consolidate their finances and recover assets lost during the past two years when prices were increasing rapidly, many mortgages became more costly, and wages didn’t keep up. The ability to save, together with the improved economic situation, is reflected in a forecast increase in spending in Q4 of +2.3%. It is also reflected in consumers’ intentions for Christmas 2024; the recent “Golden Quarter Shopper Survey” published by AL Marketing identified that 81% of consumers are expecting to spend the same amount or more than last year shopping for gifts in shopping centres/high streets – an increase of +11% from the 2023 survey results. These facts alone suggest we have justification for cautious optimism for the performance of retail and high streets over Q4 2024.”
| % change in spending in UK high streets from previous month | |||
| 2022 | 2023 | 2024 forecast | |
| Oct | +9% | +2% | +5% |
| Nov | +7% | +10% | +9% |
| Dec | +35% | +33% | +34% |
| Year on year % change in spending in UK high streets | ||
| 2023 | 2024 forecast | |
| Oct | -5.0% | +3.0% |
| Nov | -2.3% | +1.5% |
| Dec | -3.7% | +2.5% |
| Average Q4 | -3.7% | +2.3% |
| Year on year % change in spending in UK high streets – key sectors | ||||||
| Fashion | Food & Drink | General Retail | Grocery | Health & Beauty | Total sales forecast | |
| Oct | 4.4% | 3.8% | 1.1% | 0.6% | 1.4% | 3.0% |
| Nov | 2.3% | 5.2% | 0.1% | 0.4% | 1.1% | 1.5% |
| Dec | 4.8% | 3.5% | 0.3% | 0.8% | 4.7% | 2.5% |
| Average Oct to Dec 2024 | 3.8% | 4.2% | 0.5% | 0.6% | 2.4% | 2.3% |
| Average Oct to Dec 2023 | -7.1% | 1.6% | -0.2% | 2.4% | -0.4% | -3.7% |
Notes
Evidence of spending in UK towns and cities is provided by Beauclair which specialises in delivering big data for the benefit of local communities, creating positive social impact. Domestic spending data is obtained from debit card transactions from UK bank accounts. www.beauclairdata.co.uk
Diane Wehrle is Beauclair’s Brand Ambassador, delivering monthly insights on spending in UK towns and cities. Diane has over three decades of experience supporting high streets and retail destinations in understanding their performance, and focuses on transforming data into relevant and actionable insights to drive destination and business performance. Diane is regarded as one of the leading experts high streets and retail destinations and is a regular commentator on the performance of high streets and retail in the media. www.rendleintelligenceandinsights.com
Diane Wehrle collaborated with AL Marketing (www.almarketing.com) to publish their “Golden Quarter Survey 2024” which tested the opinions of shoppers on Black Friday and Christmas. The report can be downloaded here