Footfall reached its summer peak in July, improving its weekly average by +6.8% compared to June, slightly lower than had been forecast. Against July last year, it fell by 3.0%, greater than the -1.7% deficit in June.
The Retail Traffic Index (RTI), which is derived from the number of individual shoppers entering over 4,000 non-food retail stores across the UK.
Across the UK the story was very different, with Scotland & Northern Ireland recording year-on-year growth of +2.4%, in contrast to Northern England where numbers fell back by -4.6%. Shops in South West England and Wales saw a welcome boost to their footfall, with numbers up +12.0% on June.
“Consumer sentiment may well be on the rack, but both June and July’s footfall data show that people are still out there shopping”, commented Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance.
“Retail remains one of the very few parts of the economy that is driving GDP growth, but it is not just down to domestic demand. Tourist spending is at a record level this year, as foreign visitors take advantage of the weak sterling.
“It’s far from plain sailing for UK retailers though, with a record number of profit warnings issued in Quarter 2 –internal cost management and rationalisation will remain high on their agenda in the coming months. Less advantageous hedging contracts will see cost of goods rise and, despite heavy competitive to win a share of the shopper’s wallet, it strikes me as inevitable that some of the extra cost burden will be passed through to the consumer.”
However, Ipsos Retail Performance is not anticipating that the dramatic downturn in consumer confidence will be transferred to the high street. It forecasts that year-on-year footfall will hover around its current run rate of -3.0% for the next couple of months.
Dr Denison concluded, “It’s actions, not attitudes that count. With cheap credit and savings from higher annual incomes in 2016, people are still happily spending.”
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