What: The excellent retail results announced in the UK during Q4 2021 must not be taken as a new reality, since dark clouds might await.

Why it is important: The UK is currently experiencing 2 changes, one being specific (the increasing cost of life related to Brexit), and one being also experienced by IADS members, the changes in terms of peak time and traffic in stores, forcing to adapt and change opening hours.

According to data, shoppers are back in the UK however with some disparities: regions enjoy more footfall than central cities such as London and Birmingham. It appears that in London, spending does not correlate with foot-traffic: spending is one fifth lower than pre-pandemic levels, but with half of shoppers only. This could be seen as a very good piece of news, as most of retail companies (be it from hight street fashion to food) reported higher LFL sales during Q4 2021.

However, the Financial Times points out at to elements that could become worrying:

• The growing cost of living in the UK, due to Brexit, could very well result in choices made when it comes to discretionary spending (as the data suggests that affluent customers are currently increasing their spendings using the savings made during the pandemic),
• The footfall has changed in terms of periodicity: for instance, London is now more crowded at night and during the weekends, and empty during the week, forcing retailers to adapt and, for instance, change their opening hours.

UK retail is sending warning signals