Retail destinations: where are shoppers going during the cost-of-living crisis?

Outlet centres

MRI Springboard does not collect footfall on outlet centres, but reports from the centres themselves suggest business is booming during the crisis.

London Designer Outlet recently posted quarterly sales of £19.7m up 5% on a pre-pandemic basis, while the Icon Outlet at The O2 in Greenwich said footfall has increased on average 20% compared to 2019 and 23% compared to 2022.

Levi’s, Tommy Hilfiger and Skechers have all embarked on upsizing UK outlet stores, indicating that for these stores, the current economic crisis has been more of a help than a hindrance.

Icon Outlet managing director Janine Constantin-Russell told Retail Week that outlets are currently winning when it comes to responding to consumer needs.

“People have a lifestyle that they want to continue and I think premium outlets have been saying this for years: you can preserve your lifestyle and we can deliver you amazing product, an amazing experience and a really good choice of brands but at a value proposition,” she says. “I think that is where outlets are being leant on heavily.”

Johnstone Property Consultants director Mark Johnstone, who works with outlets including Gloucester Quays, Caledonia Park in Gretna and The Boulevard in Banbridge, says there has also been growing recognition of the importance of outlets among brands and landlords.

“Outlets combine the best of both worlds; they give value for money and a great choice,” he says. “The cost-of-living crisis is a definite factor in the growing popularity with consumers as the general squeeze of discretionary spend comes back to getting the best value. Landlords are looking to ensure that they are grabbing as much of that customer spend as they can.”

High streets

Footfall up 5.2% year on year (2022 vs 2023), up 4.5% month on month (May to June), MRI Springboard

With the collapse of high street icons, the rise of pureplays and the pandemic, to say that the future of the high street has been uncertain over the past few years would be an understatement. Although the cost-of-living crisis sent shivers down the spines of high street retailers, in reality, the shopping streets of the UK have fared better than most other locations. 

Superdrug, Card Factory and Lush are just some of the retailers crediting the return of shoppers to UK high streets for booming sales. But the reason for the high street’s rebound is likely to be closely linked to shoppers’ desire to make more frequent shopping trips but spend less, as it’s the natural, low-pressure shopping environment for that behaviour.

“The tills continue to ring on the high street but the baskets of goods going through them are considerably smaller as consumers prioritise essentials,” says Hayward Strategy and Futures founder Mark Hayward.

High streets also have a high proportion of value retailers, which will be contributing to their popularity.

Shopping centres

Footfall up 4.4% year on year (2022 vs 2023), 3.9% month on month (May to June), MRI Springboard

Covid-19 presented a huge challenge for shopping centres, arguably more than at any other destination type, but despite serious concerns about their future, their popularity is on the up.

As fashion favourites return to shopping centres including Zara snapping up the former Topshop premises at Trinity Leeds for its newest flagship, Sephora choosing Westfield London as its UK comeback location and Primark doubling the size of its store at Westfield Stratford City, shopping centres have been at the centre of plenty of retailer innovation in the last year. 

This activity, coupled with budget food and drink options and family-friendly “under one roof” entertainment options has made shopping centres more of a destination during the economic downturn and bagged many of them healthier footfall numbers as a result. 

Retail parks

Footfall up 1.8% year on year (2022 vs 2023), 1.1% month on month (May to June), MRI Springboard

Retail parks achieved softer footfall growth than the high streets and shopping centres in June but property group British Land still thinks they’re “the winning retail format”, according to its recent report.

According to the group, it’s all about convenience, with British Land head of retail parks and retail solus Matt Reed emphasising the importance of accessibility, free parking and a wide category offer as discounters, healthcare, drive-through food retailers and gyms all contribute to broadening their use. 

“The offer is more prevalent. Some of the discounters are better at how they brand themselves as they are not just pitching at the people who really need to use a discounter but they are trying to capture the middle-class spend. Retail parks offer a huge variety, depending on where you are in the country, from a small convenience park to a larger park that is essentially a mini town centre,” he says.

“I would be a foolish person to say it is not going to change, retail evolves at a rapid rate and it is always really hard to predict next. One trend I can see growing in retail parks is healthcare. The best example at the moment would be the likes of diagnostic centres. I can see those sorts of operators looking to take up retail park space because it is big space, easy to fit out and easy to acquire.”