Redefining Retail: Q1 2024 Review
As we move through 2024 and start to see some more encouraging economic signs, it’s a good time to take stock of the retail sector and what this means for advertisers and consumers in the year ahead.
Summer is, of course, the season of sunshine, holidays, and a noticeable surge in Out-Of-Home foot traffic.
Context and challenges
Firstly, retail is now bearing up well against a particularly challenging economic backdrop that has hit most sectors in the UK in recent times. Store closures hit the whole retail eco-system hard and some major brands have struggled. A combination of economic factors and the transforming patterns of consumer mobility around flexible working – notably driving the declining use of city centres – has redefined patterns of behaviour and business performance. But change can be a good thing and retail spaces, including shopping centres, are helping redefine the consumer experience around leisure.
2024 retail recovery
Amidst signs of growth in 2024, starting with retail sales volumes rebounding by +3.4% in January 2024 - the largest monthly rise since April 2021 – plus the more recent announcement of falling inflation - there is clear optimism now for a transformed sector.
Retail parks, for example, have seen recent growth. There is positivity in the shopping mall sector, with reduced rents driving demand and falling vacancy rates (five consecutive quarters, now) building growth and change.
There is now strong evidence that the retail sector is set for a decent 2024. According to recent ONS figures, department stores also performed very well, whilst online retail popularity has slipped, an indication of some shifting in consumer priorities.
Ongoing recovery will improve both consumer sales and enable longer term strategic decisions to be made around the transformation of malls, particularly now we’re seeing fewer fluctuations in footfall. February retail footfall was up +10% , even higher in shopping centres.
The onset of a spring and an early Easter, where mall footfall is known to receive a boost in the region of +10% , should aid the recovery and performance of a sector that generates sales of £510 billion (5% of the UK economy) and provides 2.7 million jobs.
And from what we know about advertising revenues for 2023, full year growth has taken ad spend in retail and leisure OOH environments +5% above 2019 pre-Covid levels (the industry as a whole is still not quite there yet) and in the busy Q4 last year recorded robust growth of +12% .
Hybrid retail culture driving change
The good news is that the industry is not standing still, and undergoing an exciting transformation that plays to social change as well as meeting the needs of younger audiences.
A full integration of retail and leisure experiences can now be seen in malls, big box leisure spaces and even in city centre redevelopment. Our health and wellbeing priorities are seeing gyms and health clubs fit seamlessly into these environments. But beyond this, retailer investment in the shopper experience, the return of cinema and Gen Z’s yearning for “competitive socialising” is making for a rounded use of our downtime that is generating a huge and lasting trend.
Accessible and less extreme sports and gaming experiences, the Metaverse, and immersive art and culture are all redefining the retail space as a brilliant place to connect brands with desirable audiences. The regeneration of blank canvas spaces is making retail visits a more compelling and lasting proposition, whilst changing these spaces into exciting destinations for our future generations.