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Consumer spending cuts escalate

Rob Hughes Apr 11 2008, 4:56pm

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March spells continued downturn in footfall

Figures from the Retail Traffic Index by analysts SPSL, show that the gloomy results from the Easter fortnight have continued into March. Monthly footfall numbers in the UK were down by 3.2 percent year-on-year and up by only 0.8 percent on February.

SPSL’s retail psychologist, Dr Tim Denison said: “We all knew what was coming I suspect. All the tell tale signs were in place – an early Easter, a disrupted school break and nervousness about rising inflation, the general economy and personal wealth circumstances. The coup de grace was the blizzards and unsettled weather, which simply piled misery upon misery for retailers last month. In January and February there were at least people out there in the shops, tracking down the best deals, but even this trend has fallen away in March. The dampers on shopping now seem firmly in place.

“I suppose the most positive point from the statistics is that if we take quarter one as a whole, retail traffic was only marginally down on 2007 by 0.4 percent. I for one, had fully expected the quarter to be far quieter than that. We do continue to see surprisingly high levels of inertia in shopping behaviour, despite all the negative pressures. Plainly old habits die hard. “However, every day the pinch on the consumer is reportedly more painful and less easy for them to ignore. This will be working its way through to the retailer, where the priority should probably be more about driving cash efficiencies, making every pound generated through the tills deliver that bit more before leaving the business, than purely conserving cash by aborting investment programmes. Suppliers and manufacturers can expect even tougher trading conditions to come. April will be an unsettling month all round with Easter behind us now and the summer still a long way off.”

Established in 1989, retail research group SPSL is Europe’s leading provider of proprietary tools for scientific footfall monitoring and behavioural analysis deployed by retailers. SPSL monitors more than 1.02 billion visits to over 4,600 retail premises per annum in the UK and currently operates in 14 European countries and in North America. Its customers include many of the retail industry’s most successful companies across all retail sectors except grocery, convenience and minor retail service sectors. In December 2007 SPSL became part of Synovate, the market research arm of Aegis Group.

Source: SPSL