Britain’s high streets enjoyed a welcome boost last month as early Easter brought shoppers back through the doors. But retailers warn that the boost could prove temporary as a new wave of tax hikes and wage costs hit the sector this month.
According to the British Retail Consortium (BRC), total customer numbers in the UK increased by 2.4 percent year-on-year in March. It reversed a dismal start to the year, with buyer numbers falling by 0.6 per cent in January and a shocking 4.5 per cent in February as persistent wet weather kept high streets quiet.
But behind the headline lies a more worrying story. The BRC warned that the Easter rebound, which came earlier than usual this year, fell short of what retailers had expected and that many were in no mood to celebrate as cost pressures begin to bite in April.
Shopping centers led the recovery with a rise of 2.6 per cent, closely followed by retail parks at 2.5 per cent, while high streets themselves recorded a more modest increase of two per cent. Regionally, Manchester recorded the strongest comeback with an overall increase in visitor numbers of more than nine per cent, while London was just above the national average at 3.3 per cent.
Helen Dickinson, chief executive of the BRC, expressed caution. With Easter and the school holidays falling earlier this year, retailers had expected a stronger bounce than actually occurred in March, she said. Warmer weather could help maintain momentum in the coming weeks, Dickinson added, but without a renewed surge in April the recovery is far from assured.
Andy Sumpter, retail consultant at Sensormatic, which compiles the BRC’s footfall data, was even more blunt, suggesting that March would have seen an overall decline without the Easter effect. He pointed to a worrying mix of falling consumer confidence, geopolitical uncertainty and rising costs of living, not least at the pump, as reasons why shoppers are limiting their discretionary travel. The real test, he argued, will be whether visitor numbers can hold up once the Easter boom subsides and year-on-year comparisons become tougher again.
Spirits among retail bosses were lifted, albeit tentatively, by President Trump’s announcement of a two-week truce, although that deal has since been called into question. The BRC noted that a reopening of the Strait of Hormuz, if it actually happens, could bring global energy prices back to more bearable levels before the majority of companies extend their supply contracts.
Despite this, the warning lights on the retail dashboard remain illuminated steadily. Trade associations representing both the retail and hospitality sectors are sounding the alarm about rising employment costs and April’s increase in business rates, which together threaten to swallow up any profits brought by the Easter trade.
Dickinson called on ministers to play their part by reducing the burden of domestic political costs, arguing that lower overheads would give operators the opportunity to invest in value, experience and their store offering, the very things that, she said, help drive footfall and breathe life into the local economy.
For UK SMEs, who make up the majority of independent retail operators, the message from the data is clear. Easter provided some temporary relief, but the structural pressures putting pressure on margins show little sign of easing. Whether March’s modest recovery proves to be the first bounce of the summer or just a brief respite before trading conditions toughen again, retailers fear, will depend on the decisions made in Whitehall as well as in stores.
