Shopping Rained-Off in May
Signs that an exceptionally wet month affected shopper numbers in May are seen today in The Retail Traffic Index™ from research group SPSL. The figures confirm that May was a quieter month on the high streets and in the shopping malls. The RTI showed a slight year-on-year increase of 0.8% against May 2006, but a fall of 4.5% on April’s figure.
According to Dr. Tim Denison, Director of Knowledge Management at SPSL and leading retail psychologist; “Both the BRC-KPMG Retail Sales Monitor and SPSL’s Retail Traffic Index registered a slow down in shopping activity in May. It’s really too early to say whether this is the first real sign that the series of interest rate rises are beginning to bite into the consumer’s pocket, but more likely that it was a result of the extremely wet month.
“We have been expecting a downturn since the beginning of the year on the back of earlier interest rate rises and hikes in household bills, but such has been the resilience of the consumer, fuelled by the continuing surge in the housing market, that this has simply failed to materialise….until perhaps now.
“It will take another couple of months’ of retail data to be sure that the consumer is beginning to apply the shopping handbrake. It may be, however, that the poor weather in May, rather than any economic tightening, was indeed the driving force behind the weaker results. Fashion retailers tend to be most susceptible to adverse weather conditions and this was certainly the case in May, where a year-on-year fall in traffic of 4.5% was measured for the fashion sector.”
Heavy rain across most of the country during the early May bank holiday also conspired against retailing. Despite the break being a week later than last year, retail traffic figures were barely higher. Shopper numbers over the w/c 6th May were 0.5% up on w/c 30th April 2006.
“We would normally expect a later bank holiday to produce significantly heavier comparative footfall in shops, just as we see when Easter is late. Figures for the early bank holiday simply failed to live up to expectations and it was this period more than any other that was responsible for the actual footfall growth of 0.8% year-on-year falling short of our forecast for the month of +1.9%.
“The second May bank holiday period falls into the June reporting month, but was in stark contrast to the first. A year-on-year rise of 5.7% for w/c 27th May indicates that it is too early to talk about any step-change in levels of shopping activity. It’s wise not to underestimate the resilience of the British consumer when it comes to shopping!”
ENDS