It’s springtime for retail! Retail Traffic Index™ figures from the retail research group, SPSL, released today show that, for the first time in 12 months, retail footfall is up year-on-year. In March the RTI stood 1.5% higher than for the same month in 2006; it also showed a 1.1% rise on February this year.
According to Dr. Tim Denison, Director of Knowledge Management at SPSL and leading retail psychologist; “Following two months of restraint, punctuated only by a very brief spurt of retail indulgence during Christmas and the start of the Sale period, shoppers finally shed their winter blues and hit the shops again in March.
“No doubt the better weather has encouraged people to get out, but we would also point to the strengthening ‘feel good’ factor in part psychological, in part economic. A significant number of people will have now paid off their bills from Christmas and feel able to go out shopping again without a sense of guilt. Shops in key retail sectors such as high street fashion and small electrical goods were amongst the winners too; recording small rises in footfall against last year.
“Spring, though, is traditionally the time when we turn our attention to our homes and gardens. Last year, the uplift in traffic in DIY sheds and home improvement stores around the country simply didn’t materialise in the way that we have come to expect. Fears of a stagnating housing market and rising household bills hit consumer confidence and shopping behaviour hard. This year, however, strength in the housing market has returned and this represents a major driving force behind the return of the Springtime focus on DIY and home improvement.
“In fact, the number of people entering DIY sheds and homeware stores in March was up by a more impressive 4.0% year-on-year. Notwithstanding the fact that the comparator month last year was weak, this suggests that the interest rate rises are now having little impact on quelling consumers’ eagerness to improve their properties with a view to moving up the ladder.
“For Quarter One as a whole, however, the picture is not quite so rosy, retail footfall was down by 0.9% on Q1 2006, but the trend since the depths of January has been on the up ever since. Building on the back of the uplift, we are feeling quite bullish about footfall over the Easter fortnight. We forecast that the number of shopping trips made will be 7.3% greater than last year, despite the fact that Easter is a week earlier this year.
“These latest figures will help ease the recent pressure on retailers, but there is no scope to relax. The consumer economy is still fragile and its future state very uncertain. Retailers would be well advised to treat March as a Spring bonus, rather than bank on it being the sign of better things to come. The emphasis should remain on capitalising on everyone entering a store, but also on tightening operations and improving working practices to preserve margins and profitability.
