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Shopper numbers reveal 'Wretched Month'

7 November 2008

UNITED KINGDOM — Today's Retail Traffic Index figures, the first to be published under Synovate Retail Performance, formerly SPSL, make ominous reading. The number of non-food shopping trips in the UK fell by 3.1% in October compared to the same month in 2007 and by 1.3% against September 2008.

Synovate's Dr Tim Denison said; "The figures were slightly worse than our projected year-on-year drop of 2.9%, and signal a wretched month for retailers all across the country. Allowing for Easter adjustments, this is the first month since November 2006 that all regions across the UK have registered a year-on-year decline. Shopper numbers in London and the South East fell by 3.0% against last October, the weakest performance of the year for the region, no doubt affected by the turndown in the service sector.

"The accumulation of bad-news stories over the course of the month, from the widening exposure and realisation of the financial market turmoil to growing concerns over job security appears to have had an impact on the high street in October, rocking confidence and shopping patterns. The month got off to a poor start. Some retailers sprang so-called 'mid-season' Sales to stimulate sagging demand, but despite them shopper numbers were down by 3.5% in the first week of the month against the corresponding week of 2007. Half term week at the end of the month, however, helped salvage something from the slow month. Numbers rose by 13.5% over the previous week, and were only marginally down (by -0.9%) on the corresponding half term week of the previous year.

"Retail sales, in the form of the BRC-KPMG Retail sales Monitor and retail traffic, in the form of Synovate's Retail Traffic Index, continue to track very closely. Both sales and traffic are following a similar downward trajectory. Nevertheless, my belief is that there are some fundamental changes afoot in shopping behaviour among different groups of society, which are largely obscured in the headline figures. It is not just the case that we are shopping less often, spending less on non-essentials, switching more to own-label basics and moving allegiances from middle market to value chains.

"For some people, shopping is not the enjoyable social pastime it was hitherto. It has become more of a frustration, where their eyes and hearts alight upon goods that have now become unaffordable to them. For this minority, their number of recreational shopping trips and their discretionary spending patterns in the shops has been curtailed because of the way it now makes them feel."

"For people intent still on buying high ticket items, such as white and grey goods, their motives are more likely to be about replacement than trade-up or supplementation. Though these goods have always been regarded as 'considered purchases', comparisons between sales and traffic data suggest that many of us are taking more time and trouble over our research and deliberations, thus in this arena actually generating more shopping trips. For high ticket items and probably beyond, consumers are visiting more stores and websites to ensure they find exactly what they are looking for at the best available price.

"This is now extending through to food as well as non-food shopping experiences, creating a fascinating battleground. Tesco, for example, is making strenuous efforts to re-badge itself as 'Britain's biggest discounter', whilst the likes of Lidl appears intent on building middle market appeal, offering such products as its 'luxury for all' 4.99 frozen lobsters.

"Many people have now broken their old comfortable and familiar routines to start trialling the discount supermarkets, but have come to realise that they cannot rely on them entirely for the full weekly shop. Where 'one stop' shopping used to serve us well, providing the convenience that we all craved, the downturn has introduced austerity, selectivity and preparedness to invest more time and effort in shopping. Consequently in these types of situations, traffic figures are rising relative to sales levels. Despite these types of changes to shopping behaviour amongst our society, the headline association between sales and traffic figures remains strong. It will be interesting to see how this changes, if at all, as we move forward."

"If my experience of studying retail habits for over twenty years counts for anything, it tells me that we should neither write off the British shopper, nor be complacent in thinking we know which way they are heading! Whilst most signs are that both November and December will be quieter than last year, and that sales will struggle there is still room for plenty of surprises. With petrol prices – one of the more noticeable pulls on the purse strings – on the wane and interest rates set to fall further, shoppers may decide that spending, where bargains are to be had, might seem more sensible than saving, particularly in light of current attitudes to the banking sector."

"As a postscript, I am delighted that many retailers have finally chosen to turnaround their tendency of late to introduce Christmas fare and musak into their stores ever earlier. It's the first week of November and thankfully, despite regular trips to stores in every sector, I'm still waiting to hear the first rendition of 'So here it is, merry Christmas'. Hallelujah to that!"

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.