Beauclair recently released August retail data to its client base of Business Improvement Districts and other town centre managers.
The following are some of the highlights based on sales data across 62 cities in Great Britain.
All data analyses are presented on a Year-on-3-Year basis, ie. comparing any month’s data against the same month in 2019 (the last full calendar year before covid) to account for seasonal factors.
August ’22 data highlight #1
Travel & accommodation was the only sector with improved monthly sales in August.
Up to July 2022, four out of the six main city centre retail sectors (fashion, grocery, health & beauty and travel & accommodation) were registering improving performance.
Although Food & Drink was the strongest sector in every month of 2022, with sales around 30% higher than 2019, it did not show a clear pattern of improving performance.
General Retail languished at about 30% below 2019 levels and no clear pattern of improvement.
In August, however, all the sectors except travel & accommodation saw declines in performance with an average decline in sales of -5%.
While August is normally a strong month for travel due to holidays, the same is also true for other sectors, particularly food & drink.
Travel has been strengthening since the start of 2022 as people started to come back into city centres although it is still far below its 2019 level. In January sales were down around -50% on a Y-on-3-Y basis, improving to about -25% in August.
It is interesting to see this trend continuing into August which might suggest that people are continuing to come back into city centres even as the cost-of-living crisis hits overall spending.
August ’22 data highlight #2
Sales volumes is not being driven primarily by inflation
Of the six main city centre retail sectors (fashion, food & drink, general retail, grocery, health & beauty and travel & accommodation), three showed a strong trend of increasing sales relative to the same month in 2019.
Health & beauty improved from -10% in January 2022 to -4% in August 2022. Over the same period, travel & accommodation increased from -51% to -27% and grocery rose from +16% to +31%.
While food & drink sales were strongly ahead of 2019 in every month of 2022, there was no clear trend on sales volumes. Food & drink sales were +31% in January and were +26% in August.
To assess the potential role of inflation in driving these sales trends, we have also looked at average transaction value (ATV) and average revenue per customer (ARPC). An increase in either of these may be an indicator that customers are paying more to acquire the same goods or services.
Out of the three sectors with improved sales, only one of these was due to increased ATV or ARPC. Grocery showed no clear trend in ATV or ARPC, while health & beauty showed a strong trend for mild declines in ATV and ARPC.
Only travel & accommodation showed clear signs of increased ATV and ARPC. Both ATV and ARPC improved from approximately -31% in January but that improved to -18% in August.
The rate of increase in travel & accommodation ATV and ARPC was only half as much as the rate of increase in sales. The remaining half was made up of an increase in customers as more people came into city centres.
August ’22 data highlight #3
Sales volumes is being driven primarily by customer numbers
Looking at total sales volumes across all sectors, these are also 99% correlated with customer numbers.
At a sector level, there are three sectors where there in sales volumes is over 97% correlated with changes in customer numbers.
The two sectors with the strongest correlation between sales and customer numbers are grocery and health & beauty which are two of the three sectors that a strong trend of increasing sales relative to the same month in 2019.
The other sector is fashion, which showed weak sales growth in 2022 compared to the same month in 2019.
The levels of correlation between sales and customer numbers for the remaining sectors are: general retail (89%), food & drink (84%) and travel & accommodation 60%.
The major challenge for city centres therefore is simply to focus on ensuring that customers are still coming into the city centre. At the moment, there seems to be little that city centres can do to persuade customers to spend more (or less!) money once they arrive.