Worst October shopper numbers since records began
The latest figures from SPSL’s Retail Traffic Index show that October was the quietest for retail footfall since records were first released in 1999. Shopper numbers in the month were down 2.9% against October 2004.
The three month trend also worsened, to -1.8% year-on-year. Hopes that the trend had stabilised for the rest of the year at about 1% below 2004 now seem optimistic.
Furthermore, for the first time in any October since 2001, the RTI fell month-on-month too, down 1.2% on September. A quiet half term week, down 10.2% against last year was partly to blame for the demise. London and the south east continued to suffer relative to the rest of the country. There the year-on-year decline in shopper numbers was -7.0%, falling still further from the -6.6% drop recorded in September.
According to Dr Tim Denison, Director of Knowledge Management at SPSL; “October’s figures are substantially worse than we had anticipated. It is apparent that consumers are reining in on their shopping trips now and steeling themselves for uncertain times ahead. All the retail economic indicators are showing the same thing -that consumers are no longer driving the economy the way that they have in the last few years – and that consequently retailers are beginning to really suffer.
“Traditionally, October is a very stable month with little change each year in the number of shoppers venturing out. This year is discernibly different; the half-term holidays and Halloween have passed us by without the usual turnout on the high streets and in shopping centres.
High petrol prices and the upwards tax creep are hitting people’s pockets and their response is to cut down on shopping trips. The rise in retail price inflation in September will also be worrying. The poorer people feel, the less inclined they are to go out shopping and spend.
“Retailers are clearly suffering at the hands of the parsimonious shopper. Insolvencies in non-food retailing were up by 71% in September year-on-year, and who is to say that more high profile names will not fall by the wayside before the end of the year?
“Christmas will be especially significant to retailers this year.
Already there is a lot of nervousness about and widespread rumours of early and deep discounting, despite reported protestations from key players such as M&S’ CEO, Stuart Rose, that he would prefer to go full price up until Christmas. We will see. More than ever, value and relevance will be the watchwords of the successful player, both dependent on an intimate and foresighted knowledge of the needs of the customer.”
“Apart from their impact on retailers, these figures will be most unwelcome for the Government and the Bank of England too. In past years it has been the consumer who, alongside massive public spending programmes, has maintained the buoyant economy. Now that consumer confidence is crumbling, the economic outlook looks increasingly gloomy.
Latest indications are that the country’s growth rate this year will be around 1.7%, half the level predicted by the Chancellor at the start of the year, and the weakest potential performance in 13 years.”
