December sales shopping hits January footfall in non-food stores, Index shows

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Shopper footfall in non-food stores was depressed in January 2012, according to the latest Ipsos Retail Performance Retail Traffic Index (RTI).

It measured 5.5% fewer shopping visits to non-food stores last month compared to a year ago. Month-on-month this represents a drop of 29.2% from December.

“The decline in footfall last month is certainly a disappointing start to a fresh year,” said Tim Denison, director of retail intelligence at Ipsos Retail Performance. 

“It indicates many sales shopping trips were pulled forward into December, in search of the early bargains, and by January much of the stuffing had been knocked out of shoppers.”

The first week of the year was particularly slow, with shopper numbers down 11.1% on the same week in 2011, said Ipsos Retail Performance. 

The last week of the month was also weak; the RTI recorded a 5.5% deficit against last year.

“January is always a difficult month for households, particularly those that pushed their spending to the boundary of their means over Christmas,” said Denison. 

“The quiet end to the month would suggest pockets were pretty empty by the time pay day came around. We are all too aware how much spending power has been eroded by inflation exceeding wage rises, and a consequence of this could well be greater fluctuations in the level of weekly shopping behaviour, dependent on cash availability. This is something we will monitor closely over the course of 2012, because it is a useful indication of the pressure on household budgets.”

According to the ADSA income tracker, the average UK household suffered a 7.2% drop in disposable income in December, putting average spending power at its lowest pecuniary level since January 2007. 

Confidence in the general state of the economy among households remains weak, but far from an all time low. Ipsos MORI’s Economic Optimisation Index for January recorded a value of -35, a measure of the percentage difference between those said the state of the economy would get better compared with those that said it would get worse over the next 12 months.

“2012 will be another tough year for retailing without any doubt,” said Denison. “February looks particularly weak. But there are plenty of special events and occasions ahead of us this year, which should bolster the British retail sector. 

“With such peaks and troughs likely, we expect to see greater amplitude in retail footfall levels this year possibly than ever before. Not only could this make it more difficult to trend sales against plan, but it could impact on in-store staff scheduling and continuity of customer service standards.”