‘Storm Dennis’ caused consumer footfall to drop by 9% last weekend, proving a menace to the nation’s already hard-pressed shopkeepers. And with parts of the UK still flooded four days after the storm, weaker footfall to retail and leisure destinations ‘may well have continued into much of this week’, warned Shore Capital in a note to clients this morning.
According to the broker’s retail gurus, who’ve been shown data by the British Retail Consortium (BRC), footfall on Saturday 15th February, the first day of Storm Dennis, was down 9% compared with the corresponding day last year.
Sunday the 16th was another wash out day and wetter weather conditions have continued through much of this week.
SHELTER FROM THE STORM
‘In our view, shopping centres may for once, have fared slightly better as a covered shopping mall may have provided some shelter for consumers from the weather, but high streets and retail parks less so’, explained Shore Capital.
February is traditionally a slow month for the retail trade, coming so soon after the festive spending splurge, although retailers and leisure operators would have hoped the half term break could have drummed up much-needed business.
WASH OUT WARNINGS ON THE WAY?
Yet as Shore Capital cautioned: ‘February will have been a wash out in our view, and we will watch the Met office data closely when it is published but there is a risk that February weather will be a forthcoming feature in trading statements and outlook comments in the weeks ahead.’
Two successive stormy weekends have provided another headache for struggling UK retailers already wrestling with low consumer confidence, rising business rates and national living wage costs as well as the structural spending shift online.
NEW WORRY LINE
There is too much retail space chasing weak and changing consumer demand, according to Shore Capital, which stressed ‘those operators that can fuse product and services successfully together stand a better chance to thrive in a challenging retail market.’
The broker also added: ‘Storm Dennis may have passed but a new worry line is Chinese imports, particularly for the general merchandise and some clothing retailers who are more exposed to China.’
As Shares outlined here in June, retail wet weather beneficiaries are few and far between – homewares market leader Dunelm (DNLM) being one - although indoor leisure plays such as Cineworld (CINE) and Hollywood Bowl (BOWL) may have benefited from the downpours.
In terms of troubles emanating from China, according to a press report, the likes of Halfords (HFD), B&M European Value Retail (BME), Associated British Foods’ (ABF) discount clothing arm Primark, ASOS (ASC:AIM) and DFS Furniture (DFS) could all be affected in the coming weeks as factory closures persist.