Retail footfall grows again in 2013, but the picture is not so rosy compared with levels in 2012

More shoppers headed through retailer doors in May

The Retail Traffic Index has recorded the third consecutive rise in shopping visits to non-food stores, up 1.4 per cent from April to May.

It’s the first time since 2008 that there has been three rises in a row and company failings are at their lowest level since early 2008.

The bad news is that footfall is 4.2 per cent lower than a year ago, according to Ipsos Retail Performance’s report.

Predictably, the highest growth was in London and the South East, seeing the strongest month-on-month growth (2.6 per cent in May), closely followed by South West England and Wales (+2.5 per cent). Further north, the figures were weaker. In the Midlands there was a 1.5 per cent gain, in Northern England it dwindled to +0.2 per cent, but Scotland and Northern Ireland sat on a 0.7 per cent 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.

“This is the first time since 2008 that we have recorded monthly footfall growth in the three months of March, April and May,” said Dr Tim Denison, director of Retail Intelligence at Ipsos Retail Improvement. “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 per cent 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.”

“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,” added 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 per cent 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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