By Daniel Hunter
For the third consecutive month, retail footfall levels in the UK saw month-on-month growth, according to figures released by Ipsos Retail Performance. The Retail Traffic Index (RTI), the national monthly measure of shopping visit numbers to non-food stores, rose by 1.4% from April to May, though they were 4.2% lower than a year ago.
“This is the first time since 2008 that we have recorded monthly footfall growth in the three months of March, April and May,” states Dr Tim Denison, Director of Retail Intelligence at Ipsos Retail Performance.
“By itself the trend may not be too revealing, but there is a certain symmetry appearing among various industry data and business survey results. Company failings are at their lowest level since that heady period in early 2008. Personal insolvencies, too, match that trend. The Purchasing Managers’ Index for services in April hit an eight month high and we have also seen headline inflation ease to 2.4% in April, the first fall since last September.
“There are some metrics heading in the other direction, such as the latest CBI survey results, but just a few months ago trying to find one positive headline statistic was just as difficult as finding a steerable shopping trolley. All are signs of nascent improvement in the UK economy.”
Around the country the RTI data varied quite considerably. The strongest month-on-month growth occurred in London and the South East, where footfall levels rose by 2.6% in May, closely followed by South West England and Wales (+2.5%). Further north, the figures were weaker. In the Midlands there was a 1.5% gain, in Northern England it dwindled to +0.2%, but Scotland and Northern Ireland sat on a 0.7% fall on April’s footfall levels.
In all parts of the country except London and the South East, the first week of the month (w/c 29th April) was its strongest, and in the Midlands, South West England and Wales it was the third busiest week of the year so far.
“We had expected to see healthier footfall figures at the end of Q1 going into Q2, on the back of a gradual recovery in the economy, and it’s good to see some emerge,” continues Denison.
“However, conditions remain weak and variable. Retailing is very sensitive to disposable household income and this is likely to shrink again in the near future. Inflation is expected to hit 3% in Q2 whilst wage growth is travelling in the opposite direction. So there may well be another bump in the road immediately ahead; it’s certainly too early to talk about a retail revival.
"On the upside, the significant rise in equity prices could help repair confidence and the Help to Buy scheme should stimulate the housing market, which helps drive retail demand. There is a sense that we are now out of the ‘groundhog’ period into something new.”
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