London Retailers Feeling The Pinch

Two bank holiday weekends did little to boost UK retail footfall in May, according to the latest figures from SPSL's Retail Traffic Index. London has also been badly affected by the downturn, the index shows. Figures from the BRC published last month suggested that, until now, retail sales in the capital were stronger than elsewhere in the UK.

The index rose by just 0.3 points month-on-month, from April to May. More significantly, it was down again year-on-year, by 0.5 per cent. May also recorded the worst ever month of the new millennium for retail traffic numbers in London & the South East, down 5.2 per cent year on year. The three-month moving average for the region has fallen by 4.1 per cent year-on-year, worse than the 1.1 per cent national decline.

Dr Tim Denison, director of knowledge management at SPSL, said: "This is more disappointing news for retailers, and confirms their own widespread concerns. All credible sources have been reporting a general downturn in shopping numbers since before Christmas.

SPSL suggests that the figures may be evidence that the consumer downturn may be changing from a short-term 'blip' to an ongoing trend. Denison said: "If reducing outstanding debt on credit and store cards is now uppermost in many people's minds, it will make it even harder to seduce them into spending on extravagancies.

"Retailers would be well advised over the coming months to stick to their core product strengths and staple lines, rather than look to engage the shopper with good value, but essentially frivolous items."

British Retail Consortium director general Kevin Hawkins said: "The BRC is concerned at the retail sales figures released by the CBI and SPSL in the last few days highlighting not only a worrying decline in retail sales, but also a marked decrease in the number of people visiting stores. "Retailers are clearly facing an increasingly difficult set of trading circumstances, which are showing no immediate sign of abating."