UK retail footfall shows resilience amid seasonal and economic pressures, as retailers look ahead to the Spring Budget

MRI Software’s latest retail footfall data for February revealed a dip of -0.3% compared to February 2024 across all UK retail destinations, driven by a -1.5% decline in high street activity. This annual fall reflects historical trends for February but may have been compounded this year by a particularly severe flu season, ongoing travel disruptions, and the arrival of Storm Herminia; all of which created further obstacles in driving retail and office-based footfall. Shopping centres and retail parks bucked the trend recording rises of +0.2% and +1.9%, respectively, and continues to reinforce the benefits of enclosed retail destinations.

The flu season, which has been especially disruptive in recent months, is likely to have impacted people’s willingness and ability to visit busy retail destinations and offices. This is reflected in MRI Software’s Central London Back to Office benchmark, which recorded an overall -3.5% year on year drop in February footfall; the first decline witnessed in 11 months. Train disruptions, a persistent challenge across key commuter routes, have only added to these pressures, creating a perfect storm of factors limiting weekday movement into towns and cities.

Despite these challenges, February’s month-on-month footfall provided welcome relief. Total footfall rose by +7.3% from January as the retail sector moved past the traditional post-Christmas lull. Key events including the February half-term holiday provided a boost for physical retail destinations, particularly shopping centres and high streets where footfall jumped by +9% and +11.6%, respectively, from the previous week. Valentines Day (Friday 14^th February) was also another key contributor as footfall rose by +22.3% in all UK retail destinations on this day alone compared to the week before; this was led by a +27.1% rise in high streets, a +15.4% uplift in retail parks, and +18.9% in shopping centres. Year on year, retail park growth was particularly strong from 5pm-11pm with footfall rising by +20.4% in comparison to the same time period on Valentines Day last year. This is a strong reflection of how retail parks have evolved with more experiential and leisure based options attracting visitors.

Footfall trends over a 24/7 period highlighted a core area of growth; the early evening period – from 5pm–8pm – grew by +0.9% year on year during February, continuing the positive trend in the evening economy as consumers combine leisure, dining, and retail experiences. However, wider caution remains evident in weekend footfall, which dropped by -3.8% year on year, suggesting that shoppers may still be managing discretionary spending carefully in light of ongoing cost pressures.

Looking ahead, there is cautious optimism among retailers. MRI Software’s weekly *Insights from the Inside survey revealed that 55% of retailers saw stronger sales during February’s half-term break compared to last year. However, the outlook for March is more reserved, with 58% of retailers expecting lower sales than in 2024 likely due to the later timing of Easter, which shifts key spending into April. Optimism also prevailed amongst shoppers as consumer confidence improved in February by 2 points as reported by NIQ GFK. This may have been influenced by the Bank of England interest rate cut earlier in the month, providing a glimmer of hope for some people however the majority still appear to be impacted by the cost-of-living crisis.

As the sector prepares for the upcoming Spring Budget, attention is turning to how financial policies may further influence consumer confidence and retail spending. Potential changes in tax, public spending, and household support will be closely monitored for its impact on disposable income and retail demand in the months ahead.

* A weekly survey of over 700 store managers which provides insights from the shop floor around how external factors and consumer behaviour are impacting both footfall and spending