Sunday trading ban linked to poor performance of shopping centers

Company boards, experts and public opinion remain interested in the impact of the Sunday trading ban on the retail and service sector. Having regard to the growing need to take business decisions on the basis of reliable and verified data, the Management Board of Retail Institute has decided to disclose results of the shopping center footfall between 1 January and 20 May 2018 and the overall result covering 11 weeks since the implementation of the new law, i.e. between 5 March and 20 May 2018.

The footfall at more than 120 shopping centers between 1 January and 20 May 2018 dropped by 2.6% compared with the same period in 2017. In other words, shopping centers had 3.14 million visitors less than in the first twenty weeks of 2017. Shopping centers located on the outskirts and those driven by the offer of food operators were the most affected (-4.4% and -4.3% respectively). Since the beginning of the year, shopping centers have lost 5.7 million customers, who before the new law had been doing their shopping on Sunday (-30.25%). However, some of them (+2.5 million) visited shopping centers between Monday and Saturday, which to a certain degree helped contain losses.

The data obtained by the Institute become even more interesting once the analyzed period covers first 11 weeks since the entry into force of the Sunday trading ban, i.e. between 5 March and 20 May 2018. This time, it is clearly visible that the poor performance of shopping centers in the first half of the year is linked to the new regulations and the Sunday trading ban. Indeed, between 5 March 2018 and 13 May 2018, there were:

• 2.75 million customers less compared with the same period in 2017 (-4.12%)
• 5.8 million Sunday visitors less (-58.2%)
• 3.05 million customers more between Monday and Saturday.

Moreover, the Retail Institute analysis confirms that up to the week when the Sunday trading ban became effective, shopping centers had performed well, and shows that some customers start to visit shopping centers between Monday and Saturday.

While studying the data, it should be noted that the number of business days and trading Sundays in 2018 and 2017 is different. To minimize the so called “calendar effect”, Retail Institute experts applied the “like for like analysis” (note: comparing results in weekly periods with the same number of business days, i.e. Monday-Monday, Tuesday-Tuesday, etc.) The analysis confirmed an increase of 2.9% for the shopping center footfall during trading and business days in the first half of 2018 compared with the same period in 2017. Surprisingly, after the Sunday trading ban took effect, shopping centers noted a slight footfall increase during trading Sundays of 0.67%. This data shows that customers remain willing to do their shopping on Sunday, as long as they can.

“We look closely not only at the shopping center footfall but also at the turnover generated by tenants of sales and service premises. The analysis for April, to be published on 1 June, will follow up on 3 main tendencies observed in March:

• 4.7% increase on turnover for all categories operating at shopping centers
• 7.4% drop in fashion category turnover
• almost a 20% drop in turnover of service retailers (entertainment, coffee shops, restaurants)
• 67% increase on sales of specialty food, which is partly due to preparations for Easter and the “stockpiling” effect before first Sundays with the trading ban.

If the last tendency remains constant over the months to come, it may refute the theory that the Sunday trading ban will translate into better turnover of local retailers. Compared with super and hypermarkets and specialty food stores operating on the premises of shopping centers, small retailers, even though may look charming, offer a narrow range of products (and services!!) and sell at higher prices and therefore cannot really compete with the leaders,” says Anna Szmeja, President of Retail Institute.

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