By Claire West
The Retail Traffic Index (RTI), which monitors the volume of shoppers in non-food stores across the UK, shows that retailers have The Queen’s Diamond Jubilee celebrations to thank for a small upturn in their June footfall, but this was short-lived as there was no similar three-week mini-bounce that followed the Royal Wedding in 2011.
Compiled by Ipsos Retail Performance, the RTI also highlights that summer sales towards the end of the month encouraged shoppers to visit their local high street, but the two weeks in mid-June were “business as usual” as many consumers continue to be wary of their expenditure on goods and services.
“In the current climate, I’m sure many retailers would settle for the level of footfall they experienced in June,” comments Dr Tim Denison, Head of Retail Intelligence at Ipsos Retail Performance. “As predicted in the month’s RTI forecast, the Jubilee week - with many people electing to take the whole week off - resulted in footfall of 5.5% above levels for the same week of 2011.”
In some parts of the country, this welcome boost was far greater, particularly in the North of England (+8.3%), and London and the South East (+7.7%).
However, retailers hoping for a repeat of the positive impact of the Royal Wedding on shopper numbers were left disappointed. Low levels of footfall following the Jubilee week are most likely attributable to the miserable weather during the middle of the month as well as consumers ongoing
financial concerns. After a quiet fortnight, the month ended strongly as retailers put up their “Sales” signs in a bid to stimulate interest and demand.
“Figures from PwC suggest that slightly more stores were holding sales, with 73% of retailers selling goods at sale prices at the end of June compared to 70% last year,” explains Dr Denison. “As a consequence, the week commencing the 24th June was the second busiest of the year so far (after Easter), and only marginally down (-1.4%) on the corresponding week of 2011. In the Midlands footfall flourished beyond elsewhere, registering a 0.8% increase on 2011 for the week.”
As the two weeks between the Jubilee and the summer sales were much in line with the underlying trend, it is difficult to be anything but circumspect about the prospects for UK retailers in July.
“The summer sales have started strongly, but July’s footfall will be conditioned by how engaged shoppers remain with the deals and how much stock retailers have to shift,” adds Dr Denison. “With the poor summer weather, there is some hope that sales will help shift summer merchandise.”
The next major UK event — the 2012 Olympic Games - commencing at the end of July, is likely to have a positive impact on footfall for retailers. However, the interim assessment remains pretty bleak. Economic conditions
remain largely much unchanged. Inflation has eased (CPI +2.8%), but it is still above average earnings (+1.9%) so disposable income is still dropping, albeit at a slower rate.
“The economy remains disappointing, and with global uncertainties rising again, consumer confidence remains very low,” says Dr Denison. “Events of the summer may help to energise shoppers over the odd few weeks, particularly if the weather improves, but it's going to take genuine economic growth to shift sentiment and belief in personal finance improvements. Unfortunately, there is little sign of this yet.”