Retail footfall drops by 2.6%

The Experian National Retail FootFall Index fell by 2.6 per cent in June, the fifth monthly drop this year. Experian, Europe’s leading provider of information and services related to numbers of people visiting retailers and shopping centres, stated out-of-town retail destinations experienced much larger drops in visitors, down 5.8 per cent compared to a 1.5 per cent fall in town centres.

The figures come in a month that saw heightened concerns over fuel prices as well as the oil tanker strike, published the Retail Bulletin. The out-of-town downward trend is confirmed when looking at the regional picture, which shows that the largest drops occurred in the Eastern, South West and Wales, Scotland and Yorkshire regions - areas with the largest distances to travel to major shopping locations.

“The reduction in visits to out-of-town centres is having a significant impact on retail sales because these visits have a much better conversion to sales ratio and generate much higher value purchases for retailers,” explains Jonathan de Mello, Experian's Director of Retail Consultancy. “People generally drive to out-of-town destinations with a specific large purchase in mind and there is far less browsing than is the case in town centres.”

Retail business failures are also on the rise according to Experian's latest insolvency figures. There were 282 non-food retail business failures in the last three months compared with 226 failures in the same period last year, a rise of almost 25 per cent. The last twelve months saw a total of 454 non-food retail failures, compared with 393 the previous year, a rise of 15.5 per cent. However, the last three months accounted for almost two thirds of the annual total, suggesting a dramatic acceleration in the rate of retail business bankruptcies.

“The steady drop in footfall contradicts ONS retail sales figures, but is in line with other surveys,” adds Matthew Sherwood, Senior Economist at Experian. “Even the Bank of England is now giving more weight to surveys when accessing the health of the UK consumer.

“Consumer confidence is currently at an 18-year low and this is having a significant impact on consumer spending.We forecast a slowdown in retail activity as consumers continue to hold back on out-of-town visits or making major purchases as they focus their spending on the upcoming summer holiday season.”

“As visits to out-of-town retail destinations decline, there is evidence that many more people are staying at home to shop online,” comments Robin Goad, Research Director at Hitwise, an Experian company. “UK Internet traffic to retail websites has increased by 6.5 per cent compared with last year. One of the main growth drivers is the number of people searching for bargains online, with searches for 'sales' having reached their highest since Christmas. Another factor encouraging people to shop on their computers from home is the high price of petrol.

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