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Shoppers and retailers in discount stand-off

23 December 2008

UNITED KINGDOM — Figures released today from Synovate Retail Performance show that the number of people out shopping across the UK in the third week of December (14^th to 20^th December inclusive) was up by 12.3% on the previous week, but down by a very significant 10.7% on the corresponding week of 2007. Over the course of the final weekend before Christmas (20^th and 21^st December), retail footfall on Saturday was up 15.4% on the previous week, but down 5.0% on the same Saturday in 2007. Sunday followed a similar pattern with shopper numbers up 8.5% on the previous week, but 4.5% down on last year. Monday (22^nd) saw shopper numbers up 1.6% on Saturday, which knocked Saturday off the top slot as the busiest day of the year so far.

The West End of London provided the main source of cheer for retailers. There, the number of non-food shopping trips over the weekend, stimulated by tourists capitalising on a weak pound as well as by local last-minute bargain hunters, was up by 24.5% on the previous weekend but was nevertheless down by 1.5% year-on-year despite some extraordinary claims made elsewhere.

Synovate retail psychologist Dr Tim Denison explained, "Overall, retailers will be slightly disappointed by these top-line figures. The main damage was suffered in the early and middle part of last week. It wasn't really until Friday before we saw week-on-week figures showing the sort of double digit uplift that we have become accustomed to seeing in the final full week before Christmas.

"Shopping activity since Friday has certainly improved and should be considered as 'respectable' in the context of current conditions, but the quiet start to last week represents lost ground that will not be recovered."

Denison continued, "With just a couple of trading days left before Christmas, retailers will be hoping that shopper numbers will continue to swell and strengthen right up until closing time on the 24^th. The principal problem the shops have faced is simply very weak levels of underlying demand, where even price cutting has had limited impact. However, with one or two notable exceptions such as MFI and Woolworth, this has not been a 'give away' Christmas for most retailers. The vast majority of them, despite offering some limited, selected stock at savagely discounted prices, have kept most discounts to a very sensible level. This has created something of a discount stand-off between shoppers and retailers with many shoppers expecting better bargains than they've actually realised on the goods they really want.

"What we've yet to discover is the retailers' game plan for their Sale season after Christmas. With non-food shopper numbers in the first three weeks of December down by 8.0% year on year (slightly worse than Synovate's forecast of a fall of 7.3% for the month) there is likely to be more Christmas stock unsold than hoped and shoppers who can still afford to spend after Christmas may, finally, be spoilt for choice in both selection and price."

The next figures to be released by Synovate will be on Christmas Day, reporting upon the two final days of Christmas trading, 23^rd and 24^th December.

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.