2020, Despair, Recovery and Consolidation. Part Two

This is part two of our feature exploring what has happened since July and to what extent have our thoughts changed, part one can be read here

Throughout 2020 we have been monitoring the data flows across our systems and infrastructure, analysing and reporting the impact of the UK’s COVID19 management and response. We like many have shared this data with the DFT to assist in their modelling of transport usage and motorist behaviour.

The graph below is a familiar update to our previous example, of data infrastructure activity below, you will see it plots three sources of information:

  • The Blue Line shows the Office for National Statistics (ONS) data on the overall volumes of all road traffic on UK A roads and Motorways.
  • The Red Line shows the volume of ANPR reads across our infrastructure
  • The Yellow line shows the volume of enforcement actions across the Zatnation.

On 31st October (Point E), following projections that there could be several thousand COVID deaths a day as we progressed into winter, Prime Minister Boris Johnson holds a Downing Street press conference at which he announces a second lockdown for England, for four weeks from Thursday 5th November to Wednesday 2nd December, in order to prevent what he describes as a “medical and moral disaster” for the NHS. England will then revert to the tier system.

We are still finalising November’s Data, with ANPR enforcement actions moving through our system process, as these are approved the overall Zatpark Enforcement Actions statistics will firm up, we anticipate at around 80% of their early March level. We anticipate strong numbers from across our customers serving retail, with shoppers spending £10.9 billion in supermarkets during November, making it the single largest month ever for grocers, according to the latest figures from Kantar. November as a whole saw shopper frequency hit the highest levels since the beginning of the pandemic, although December’s figures are set to rise even further, likely to come in at £12 billion, £1.5 billion more than last year.

Retail sales on Black Friday have fallen sharply despite a boom in online spending as non-essential shops remain closed on England’s high streets during the second lockdown period.

Retailers said online sales hit record levels on the pivotal discount day to soften the blow from the closure of stores. However, UK figures from Barclaycard, Britain’s biggest credit card provider, show payments made in physical stores and online fell by more than 10%, compared with Black Friday a year ago.

John Lewis however, said Black Friday would break all of its previous records for online spending, with sales up by 35% compared with its busiest day during the same period a year ago. It said 2.5m products had already been shipped since it started offering Black Friday offers on 20th November – up 67% on last year – and that record searches had been made for new games consoles, beauty products and Lego kits. Whilst the extension of “Black Friday” from a single day to a month long, DFS-esq, sale may account for some of the increase in sales experienced by some retailers; one could also argue that there has been a rush to trusted safe haven brands such as John Lewis, M&S and B&Q with omni channel purchasing, delivery and return capabilities at the expense of independent retailers both on the high street and online.

Whilst strong performance of cornerstone retailers such as Joh Lewis is good news for our highstreets and retail led parking, one cannot ignore the impact of the accelerated growth of pure play online retailers during 2020. Perhaps some of the spikes in ONS traffic data has been affected by the ever-expanding fleets of Amazon, Hermes and DPD.

December is usually the key month for retail and one of the busiest and most fraught for parking management. Ipsos Retail Performance, which compiles the Retail Traffic Index, is predicting that shopper numbers in non-food stores in December will reach 44.3% of the levels set in 2019.

If proven to be the case, the deficit on last year would be worse than the improving picture the retail industry saw prior to the second national lockdown. With the majority of northern England under Tier 3 restrictions and non-essential stores remaining closed in Scotland and Northern Ireland, local lockdowns continue to impact shopper numbers.

At the time of writing, London and parts of the wider South East of England are tipping into Tier 3, with expectations that the relaxing of rules around the Christmas period will adversely impact the R value across the country sending further, if not all, regions of England (at least) into the highest Tier 3. This will have a similar impact on Traffic, Parking volumes and Enforcement actions as we have seen during the second Lockdown of November 2020, perhaps with lower volumes of Parking activity due to the usual retail and leisure spending decline in January.

With the next rent quarter day on 1st January, and then 1st April 2021, the next few weeks are going to be vital for, not only retail as a sector, but the wider commercial property environment and its institutional investors.

As we anticipated earlier in the year the recovery back to pre-lockdown volumes is likely to be long, with structural changes in the retail and office sectors exacerbated as fewer people commute to a single place of work each and every day, with more discretionary and impulse spending done online.

The direct and indirect effects on the parking sector will be significant, with conceivably lower requirements for multiple large facilities particularly in tertiary town and city centres but with increasing need for space and management in suburban and local environments.

We are already seeing a trend to higher frequency, shorter duration parking for some operators in market town and suburban environments. This will likely in the short-term lead to some cases of friction where, for example, a motorist returns to the same supermarket carpark multiple times within an allowable duration. It will take time for landowners and operators to work through any changes to the terms and conditions of parking; rest assured at Zatpark our nodal flow process is designed to implement changes in an intelligent manner to either specific sites, groups of sites or across entire estates.

As is the norm during a time of change, there is currently consolidation happening across the market, with many succession plans now unravelled and prudent businesses in acquisitive positions, we anticipate groups of operators forming around defined differences, formed through close relationships with landowners who are creating scale to invest in the future of mobility and parking as the UK transitions to not only a post COVID world, but a post European, post internal combustion reality. The increased use of technology is an inevitable trend, with some of the market consolidation occurring accelerating the adoption of tools such as ANPR for some smaller operators.

As we held earlier in the year, now is the time for the parking sectors leadership to be advocating and lobbying for greater support to enable carparks as part of the wider commercial property sector to innovate and evolve, perhaps as part of the wider green transport infrastructure the country will desperately need as we transition to electric vehicles and non-traditional models of car usage and ownership.

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