As we have moved into retail’s “Golden Quarter,” city centres have proved themselves much more resilient than the rest of the retail sector, with stronger monthly and quarterly growth.
Looking at annual data and particularly compared to the same month in 2019 before the lockdown, it becomes clear however that city centres have not yet made up the ground lost due to the covid pandemic. Phenomenal sales growth in the Food & Drink and Grocery sectors has not compensated for the weakness in other sectors such as Fashion and the huge declines in sales from General Retail (which includes department stores).
This article compares Beauclair’s data from 62 city centres across Great Britain with the monthly retail data produced by the ONS for the whole country.
Monthly and quarterly sales
The ONS recorded a +2% increase in monthly retail sales in October, following a fall of -1% in September. It connects the fall in September sales with the events related to the death of the Queen.
The picture for city centres follows similar trends but with more dramatic movements. Monthly sales dropped by -4% in September before bouncing back by +9% in October. This suggests that city centres were more affected by the bank holiday and other events associated with the death of the Queen than the rest of the country.
Over the last quarter, the ONS sees a -1% drop in sales, whereas city centres saw +1% growth. The growth in city centre sales is perhaps connected to the stronger return of workers into city centres after the end of the summer. This trend was perhaps weakened in September by the Queen’s death and funeral.
Longer-term performance
Over longer time periods, however, city centre performance becomes less robust compared to the national picture. The ONS shows national retail sales up +5% over October 2021 and up +14% on October 2019. City centre sales have been much more anaemic with just +1% growth on a year go and a -1% drop on October 2019.
Sector performance
Looking across the major retail sectors, this same trend of stronger short-term but weaker long-term performance is repeated for all sectors except food.
General Retail
The ONS has non-specialised stores growing +0.4% on a monthly basis compared to +13% growth for General Retail in city centres. On a quarterly basis, the ONS shows a -1% decline compared to +13% growth in city centres. Compared to October 2021 the ONS shows +2% growth and just +0.3% growth from October 2019. For city centres, the corresponding figures are -1% and -26%!
Fashion
Textile, clothing and footwear stores grew by +2% on a monthly basis and shrank -2% on a quarterly basis. Fashion sales in city centres over the same period grew +12% and 0%. Compared to both October 2021 and 2019 the ONS shows +6% growth while the same figures for city centres are -1% and -3%.
Household
Comparing household goods stores according to the ONS with Beauclair’s data on Household sector city centres sales shows the following: monthly = -2% vs +11%, quarterly = -1% vs +14%, yearly = -5% vs 9%, three-yearly = +5% vs -12%. Although city centre Household sales in city centres have managed annual sale growth, strongly ahead of the national data, compared to the same month in 2019 the sector shows marked weakness, just like Fashion and General Retail.
Food
As mentioned above, the major exception is the food sector. The ONS sees this sector as growing +0.3% on a monthly basis and +2% on a quarterly basis. Compared to the same month in 2021 and 2019 the figures are +5% and +11%.
In city centres, both the Food & Drink and Grocery sectors massively out-performed the national picture. Grocery was weak in the last quarter, growing +6% on a monthly basis and shrinking -1% over the last quarter. Yearly growth, however, was +4% and growth from the same month in 2019 was +19%. Food & Drink’s growth is even more dramatic. It shows +13% monthly growth, +2% quarterly growth, +4% annual growth and a massive +38% growth since October 2019.
Conclusion
City centres have been hit much harder than the rest of the retail sector by covid. While there have been some winners such as Food & Drink, the change in the overall retail mix towards food and away from general retail has not been sufficient to offset the covid impact. Looking forward, the key question for city centres is whether to accept that covid has permanently destroyed overall demand for retail. Or, can city centres make further changes to the retail mix and fight back?