Retailers not so jolly about Christmas trading.
Although figures released today from FootFall indicate another month-on-month improvement in retail footfall levels throughout November, with a 4.7% rise, they represent the worst build up on record for the immediate pre-Christmas period.
As this underlying trend continues, it is a real concern for retailers who are failing to ignite the usual demand from consumers.
The Retail FootFall Index also shows visitor numbers remain significantly lower than 12 months ago, with November’s -7.3% drop continuing a run of falling shopper visits, on a year-on-year basis, that stretches back to mid 2005.
Natasha Burton, spokesperson for FootFall, comments: “Since the interest rate rises and increases in household bills, there has been extra strain put on people’s resources and this has discouraged them from non-essential spending.
“High street demand also appears to be flattening out, particularly on the food side. We are already hearing a number of reports that this will be the worst Christmas for over 25 years and on the evidence that the RFI index is showing, this could be a bad end of year for retailers who have normally relied on buoyant trading throughout the festive period.
“There is also some uncertainty about the Monetary Policy Committee (MPC) considering a further interest rate rise. In our view, the case for an increase is weak but there is still a risk that the MPC may act given the resilience of the housing market.”
Martin Davies, Director of Retail Planning for Experian, comments: “While the upward trend of shoppers visiting retail parks and shopping centres began as usual in October, the lag behind previous years is glaring.
“However, the regional pattern of shopping visits in November shows a high degree of variation. For example, the South West and Wales are outperforming the national picture with footfall increases of over 5% on last year. And as the final dash for Christmas shopping starts, these regions begin their December trading with a more positive outlook for the final month of the year.
“The complexity of Christmas shopping this year is surrounded by choice of destination as well as choice of channel. Consumers now have a choice of destination that includes out of town venues with high street outlets and supermarkets – the smallest of which sell CD’s and selected gifting, the largest of which sell portable purchase gifting alongside bulky and speciality electrical items – often for 24 hours a day.
“Over the past week, there has been a noticeable shift in the days of the week that people shop, with consumers choosing to browse the high street offerings during their lunch hour rather than making special pre-planned trips at the weekend. The popularity of internet shopping and speciality catalogues are adding to the blurred retail landscape.
“With three full trading weeks until Christmas we have already started to see phantom sales and special promotions appearing across the board. It is likely that savvy consumers are going to hold back in expectation of future bargains, take advantage of buying gifts alongside their groceries, or buy on-line from the convenience of their own homes.”
Retail FootFall Index (RFI) – November 2005 Month-on-month change for November (Nov 2006 v Oct 2006): +4.7% Year-on-year change for November (Nov 2006 v Nov 2005): – 7.3%
