Covid-19: Worse to come, says CACI report as retail footfall plummets

UK retailers experienced a drop in footfall of around 60% in the second week of March, following warnings about the coronavirus outbreak – with worse set to follow, according to new figures from analyst CACI. However, the group predicts that more agile retailers will eventually emerge from the crisis with an advantage.

A survey by the group has found that the vast majority of consumers (86%) have made changes to their non-food shopping behaviour, though there have been geographic differences to the response. The research was carried out before the latest restriction on the opening of non-essential stores.

Customers in London, which has seen greater penetration of the Covid 19 virus, and Northern Ireland, which is reflecting the more rapid response to the crisis from the Irish government, were faster to make lifestyle changes. Urban consumers made changes to their routines faster than those in rural areas.

Despite being at greater risk, older consumers are less likely to have changed their behaviour than younger shoppers, with those aged 25-34 the most likely to be following official advice.

Further restrictions on movement, and an increase in cases of the disease, are expected to cause a further reduction in footfall over the coming weeks. Half of shoppers are expected to reduce their in-store retail spend, with 39% expecting to increase their online spend – though delivery networks are facing intense pressure.

Most consumers say they plan to revert to their previous behaviour when the current crisis is over.

“Whilst the consumer intention to revert to previous patterns is positive it must be remembered that we will emerge from the crisis with a unique situation where everyone's market share is near zero and all operators are targetting all customers,” said the CACI Report by Alex McCulloch, director of CACI Property Consulting Group. “This is an unprecedented opportunity to target previously very challenging market share as all shoppers are up for grabs.”

Brands such as restaurant chain Leon could be among those agile companies. The group is turning its restaurants into mini-supermarkets and launching a new eCommerce platform, to reduce the pressure on conventional supermarkets – most of which are having to limit the number of products customers can buy.

“Right now you have struggling restaurants and their staff ready to provide food to customers on the one hand, and on the other, supermarkets with empty shelves. The balance isn’t right. Not for customers, not for people facing job losses and not for businesses,” said Leon founder and CEO John Vincent.

“Our findings reflect that, despite the extraordinary times we are in, people are focused on coming out the other side. Our report is evidence that although the older groups are more at risk, they are less likely to have moderated their behaviour, compared to those aged between 25-34, with Londoners and the Northern Irish most likely to have changed how they live their lives. This is likely to be a result of London being more densely populated, andreflecting the more advanced stage of the pandemic in the capital, and the greater proximity to actions in Ireland,” said McCulloch at CACI.

“At these early stages with government restrictions being put into place across the country, it can be difficult to see a positive light at the end of the tunnel, however, this is also a time of opportunity with the biggest winners being local shops and online shopping. The property and retail sector has the opportunity to capitalise on the rapid changes. Retailers and landlords should be working together to deliver a cohesive community-led offer as well as sharing the risk. When restrictions lift, the industry needs to listen and adapt to changing consumer trends; 70% of shoppers believe they will return to previous patterns of behaviour, while 5% plan to increase their spend.”

Research from GlobalData suggests the retail industry can expect £12.6 billion to be wiped from UK sales this year – the same amount Aldi recorded in sales for the whole of 2019.

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