Capital & Regional is encouraged despite inflation

Capital & Regional, which owns a portfolio of community shopping centres in the UK, says it is seeing encouraging signs that consumer sentiment is shifting back to its sort of retail assets, even as the country battles with inflation that is at a four-decade high.

In the four months to the end of April 2022, footfall was 193.3% of the equivalent period for 2021, the group said in an update before its AGM later on Thursday. In total, there were 18.4million shopper visits, equating to about 76% of the footfall for the equivalent period in 2019.

UK brick-and-mortar retailers have been under severe pressure in recent years by Brexit, the rise in e-commerce and, more recently, Covid-19 and inflation.

Capital & Regional had a portfolio worth £380m (R7.5bn) at the end of December, and it specialises in shopping centres that dominate their catchment, serving the non-discretionary and value-orientated needs of the local communities.

UK consumers, like those in many countries, are under pressure from surging energy and food costs, and data on Wednesday showed consumer inflation surged to a 40-year high of 9% in April.

“Since the start of the year the group has continued to deliver strong operational results, with footfall at almost double what it was for the same period last year and at the highest levels since the restrictions were put in place in March 2020,” CEO Lawrence Hutchings said in the update.

“While inflationary pressures across the UK economy provide a challenging economic backdrop, we are seeing physical retail reaffirm its important place in the retail mix and signs of a shift in sentiment towards our sector, especially in needsbased or nondiscretionary community centres,” he said.