The mixed messages of June footfall
26 September 2007
UNITED KINGDOM — The latest Retail Traffic Index™ from research group Synovate Retail Performance reveals that June saw retail footfall rise by 3.0% year-on-year and by 4.4% on May. Shopper numbers over Quarter Two as a whole were up 2.2% against 2006, a reverse of the 0.9% drop recorded for Quarter One. But the underlying message is not quite as simple as it first seems.
According to Dr. Tim Denison, Director of Knowledge Management at Synovate Retail Performance and leading retail psychologist; "At first sight June's figures look remarkably healthy, but we have to bear in mind that June 2006 was a weak month for retail footfall in the non-food sector. England's matches in the footfall World Cup took centre stage last June and the shops, with the exception of supermarkets and off-licenses, were, as a consequence, quiet. That said, this is the fourth month in a row in which we have reported more shoppers in stores compared to 2006.
"What may be more significant however is that for the second month in a row, the weakest sector has been high street fashion. Shopper numbers in June were down by 0.2% against a year ago. Even the early arrival of the summer Sales on the high street has not managed to counter the combined effects of another month of miserable weather with the first real stirrings of a long-anticipated drop in discretionary spending triggered by what must seem to many to be an endless series of interest rate increases.
"Generally though, Quarter Two has proven to be stronger than Quarter One, despite the squeeze tightening on the consumer's disposable income. For months now, many consumers have defied the inevitable and carried on shopping freely. This is despite discretionary spending being at a 5 year low, now standing at just 22% of the average household's gross income according to Ernst and Young. People seem happy to simply carry on living for the moment, rather than to save for a rainy day. The household savings ratio (the percentage of disposable income left unspent by the consumer) now stands at a 47 year low and most consumers are unlikely to be able to ignore the effects of this indefinitely.
"The spate of interest rate rises has failed to change the situation significantly, mainly because they are yet to register on the majority of people's fixed term mortgage repayments. But it is only a question of time. Even the continued, but apparently slowing, rises in house prices won't now provide the comfort that they have done of late.
"Moving into Quarter Three, I genuinely believe that we are sitting on the cusp of a gentle downturn. Retailers will probably be praying that the pound remains strong against the dollar to help preserve margins on third-world sourced goods, but they should now expect that consumer demand will begin to noticeably weaken.
All enquiries for follow up or interviews with Dr Tim Denison should be directed to Theo Chalmers at Verve PR on 01908 275271 (weekdays) or 07932 004632.
Contact(s) for this press release
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Tim Denison
Synovate Retail Performance |
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34 Walker Avenue |
Tel. +44 (0) 1908 682 700 |
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Theo Chalmers
Managing Director, Verve Public Relations |
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Park House, 8 Grove Ash |
Tel. +44 1908 275 271 |
Synovate Retail Performance provides footfall monitoring solutions, shopper tracking systems and in-store behavioural research to retailers worldwide. Its core products - Shopper Count, Shopper Interact and Shopper Engage - scientifically measure all aspects of a shopper experience from store entry to exit. It supplies national and international retailers with essential business metrics to drive accountability and performance improvement.
Synovate Retail Performance is home to the Retail Traffic Index series, which for over 10 years has been the industry's leading tracker of national, regional and sector retail footfall trends. It is also co-founder of the KPMG / Synovate Retail Think Tank, offering thought leadership on the state of retail health and the future of retailing.
General information for Synovate Retail Performance, email info.rp@synovate.com
Synovate Retail Performance Limited is registered in England and Wales under number 3552625 with its registered address at Minerva House, 5 Montague Close, London, SE1 9AY, UK. Synovate Retail Performance is a wholly owned subsidiary of Synovate.
About The Retail Traffic Index (RTI)
The RTI from Synovate Retail Performance is regarded as the national benchmark of retail shopper traffic flow. It is constructed using a nationally representative sample of over 520 million visits to over 3,100 retail premises per annum across the UK, excluding the grocery, convenience and minor retail service sectors.
For further details and a full explanation see here.
About the the KPMG / Synovate Retail Performance Retail Think Tank
The RTT was founded by KPMG and Synovate Retail Performance in February 2006. It now meets quarterly to provide authoritative 'thought leadership' on matters affecting the retail industry. All outputs are consensual and arrived at by simple majority vote and moderated discussion. Quotes are individually credited. Releases and White Papers can be viewed by visiting here.
About Synovate
Synovate generates insights to help clients drive competitive brand, product and customer experience strategies. Now part of Ipsos, with offices in over 80 countries, our approach combines best in class global research capabilities with personalised service, local knowledge and the flexibility to create teams and processes that meet clients' specific requirements. At Synovate, our clients sit at the top of our organisational chart, driving us to continually develop more innovative research solutions that predict actual business outcomes.
For more information on Synovate visit www.synovate.com.