April Shopper Numbers Uplift ‘Just a Distortion’
Retail research group SPSL’s Retail Traffic Index for April rose by 1.4% year-on-year and by 10.1% on March, marginally better than forecast, but the uplift is likely to have been a simple reflection of the shift of Easter from March last year to April, this.
Dr Tim Denison, Director of Knowledge Management at SPSL comments on the figures; “Retailers will welcome seeing a ‘return to the black’ in the year-on-year comparison for the number of people out shopping in April.
This is the first time we’ve seen it in 2006, but the figures are distorted by Easter. If we combine March and April’s footfall together, the RTI is down 4.7% year-on-year, showing the downward trend in shopper numbers remains unchanged.
“Consumers unquestionably have lingering economic concerns which are discouraging them from going out shopping. Some are here-and-now factors, such as fuel and utility prices; but the majority are niggling doubts and concerns for problems which may affect us around the corner; such as council tax rises, higher inflation, doubts about job security and prospects, uncertainty over pensions and price trends in the housing market.
“Whether all or some of them come to fruition is largely immaterial to the current consumer state of mind. The fact is that they have combined to generate a psychological reluctance for people to go out shopping in the way that they have become accustomed to in the recent past.
“For a number of years now, both consumer and public spending have been responsible for maintaining a strong economy, but it seems that we are finally seeing a rebalance away from consumer spending and towards investment and exports. Retailing has been a key driver of service sector growth, but business services and finance have taken over the mantel, with the performance of retail currently the weakest in the services sector.
“As ever there are some significant differences around the country, none more so than in London and the South East. Retail footfall in Central London continues to buck the downward national trend, with numbers up by 14.0% year-on-year in April and 9.0% in March and April combined. A surge in City activity, an influx of businesses and financiers and booming house prices have all had a positive influence on retail in the capital. Elsewhere in the London conurbation and the rest of the South East, shopping and house prices remain in the doldrums. For the region as a whole, shopper numbers were down 1.0% year-on-year in April and down 5.0% for March and April combined.
“The national trend is heavily influenced by activity in the South East.
Our ongoing forecast for shopper numbers remains well below last year, stuck between a 4% and 5% deficit year-on-year, but this would improve significantly if we were more confident about shopping levels in the South East, which remains the most depressed part of the country. As things stand though, the strengthening economic outlook is yet to translate into any upturn in shopping activity there, as we step into summer.
