By Daniel Hunter

Latest retail figures released by Ipsos Retail Performance show another decline in the number of trips being made by UK shoppers to non-food stores.

The Retail Traffic Index (RTI), which measures the levels of shopper footfall across the country, showed that shopping visits fell in February by 3.6% compared to February 2012 and by 7% against January this year. Northern England and London and the South East were worst affected where year-on-year footfall fell by 4.5% and 4.4% respectively.

“The statistics don’t lie; the first two months of the year have been quiet for retail outlets, though the seasonal fall in February was not as severe as last year,” comments Dr Tim Denison, Director of Retail Intelligence at Ipsos Retail Performance. “We expected ‘more of the same’ in 2013 and it has started out that way.”

Despite current employment growth and inflation easing, the RTI figures suggest that households remain cautious about their spending on the high street, constantly alert to breaking news on the likes of fuel and energy prices rises.

“The general reluctance by consumers to spend is entirely understandable, given the Government’s fiscal consolidation programme,” adds Dr Denison.

“On the upside, most of the tax rises affecting people have now taken place, and some householders fearing the worst, may now be feeling a little better about their finances and might release the handbrake a little. On the downside, the majority of the public spending cuts are still to hit, so disposable incomes remain under threat for many, albeit from a different source.”

As for retailers, they may still be feeling the blues because of low demand, but on the back of a year that celebrated Britain so well, Dr Denison says that it could make sense to add more ‘red and white’ on the supply side.

“There has never been a better time than to source from within the UK,” he explains. “It was less than six months ago that the nation was determined to keep the national flame alive after the success of the London Games and on the coat tails of the Jubliee celebrations. With the gradual devaluation of sterling against the dollar and the Euro since October, import substitution is a topic that should be high on board room agendas around the country.”

At a time when cost management remains a prime challenge, local sourcing can remove unnecessary complications and dependencies. But as food retailers have discovered amidst the furore of the horsemeat scandal, cost management should not be at the expense of product quality and supply chain integrity.

Dr Denison says: “The horsemeat fiasco may prompt shoppers more generally to consider the price pressures they are putting retailers under, in seeking out ever-better discounts, and the consequences these pressures may bring.”

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