Sunshine and Sales bring out the shoppers in June says Synovate
6 July 2010
UNITED KINGDOM — June's retail footfall figures from Synovate Retail Performance rallied a little over recent months. The UK Retail Traffic Index, the national measure of shoppers entering non-food retail outlets, fell by 2.1% year-on-year in June, marginally better than Synovate's forecast of -2.3%, and substantially stronger than the annual comparisons in April and May, when traffic levels were down by 4.8% and 3.7% respectively. Against May, retail footfall was up by 5.4%, the largest month-on-month increase since last July, with the exception of the usual December spike.
"It is remarkable how warm, sunny days in Britain help bring out the 'feel good' factor and encourage us to go out shopping, particularly when they coincide with the arrival of the summer Sales," comments Dr Tim Denison, Director of Retail Intelligence at Synovate Retail Performance. "After a long winter and a spring full of uncertainty, shoppers let the handbrake off a little last month. Though retail footfall in June was still down on last year, the figures were slightly better than we had expected, particular in light of the content of the emergency Budget and the kick-off of the World Cup.
"The month started very strongly with shopper numbers up 5.7% year-on-year in the week of the Spring Bank Holiday, reflecting the start of the good weather and heavy promotions on latest technology televisions, ahead of the World Cup. The rest of the month unfortunately didn't match this early performance, but still managed to stand up well, despite the disruption caused by sporting events led by the football in South Africa."
For most non-food retailers, England's early departure from the football competition will have been welcomed. Shopper numbers on the days of England's three first round matches were down by 12.0% year-on-year against the USA, 11.2% against Algeria and 16.4% against Slovenia with traffic levels peaking far earlier in the day than we would normally see. For the second round match against Germany on the afternoon of Sunday 27th, shopper numbers were down even more significantly by 26.9% year-on-year. With the distraction of England's presence in the competition over, retailers will be hoping that the good weather continues so that they can resume making hay whilst the sun shines.
For quarter 2 of 2010 as a whole, retail footfall was down by 3.4% year-on-year, representing a further slowdown on quarter 1 when it had fallen by 2.7%.
Denison continues, "I believe we are still on track to meet the forecast we made in January, that retail footfall will fall by 3% in 2010 over 2009. The rest of the year is unlikely to see any further progressive decline in retail traffic, but equally, June's improvement does not mark the start of a turnaround. Householders are very much aware of the ongoing frailty of our economy, the austerity measures announced in the coalition Government's emergency Budget, the growing nervousness about stagnant pay awards and job security, the possible re-activation of a credit squeeze and the sovereign debt crisis, all of which are now bearing down rapidly on the consumer economy.
"The Government's decision to delay the introduction of the VAT rise until January 2011 is one piece of welcome news for retailers. It should generally help retailers over the second half of the year. Those selling high ticket items will promote and advocate buying early before the tax rise happens, which should provide a fillip to sales, particularly in quarter 4. Many will also consider gradually phasing in higher prices ahead of January to prevent a stark jump in high street prices and will be negotiating early and even harder with their suppliers; these actions will actually serve to strengthen margins in the short term.
"Pricing strategy", Denison concludes "will become a fascinating competitive battleground over the coming months in the non-food sector, particularly as the consumer becomes ever more vigilant of price points in the run-up to January 4th."
Enquiries for interviews with Dr. Tim Denison should be directed to Joanne Humphrey, joanne.humphrey@synovate.com / +44 (0)20 3059 4808.
Contact(s) for this press release
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Chris Scoot
Synovate Retail Performance |
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34 Walker Avenue |
Telephone: +44 1908 682 700 |
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Joanne Humphrey
Associate Director, Marketing & Communications Synovate UK |
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Telephone: +44 20 3059 4808 |
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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 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.