Shopper numbers hold up well in September despite the financial crisis
Figures released today from the Retail Traffic Index (RTI) from analyst SPSL show a return to year-on-year decline, after a one month rally in August.The latest figures report a fall of 0.9% on September 2007 (following the 0.1% year-on-year rise in August) and a rather more stark 11.0% seasonal decline on August's retail footfall. Quarter 3 also saw a fall of 0.9% against Q3 2007, a slightly better result than the 1.1% drop in Quarter 2 this year.
SPSL's retail psychologist, Dr Tim Denison said; “Despite so much downbeat news around, the weakness in the economy currently lies more with the corporate sector - in the financial markets, banking and inflationary pressures in particular - than with any over-arching failing of the consumer. Shoppers are not intractably becalmed, although they are understandably more cautious while every headline spreads more gloom.
“The RTI has held up remarkably well so far this year, showing that shoppers are nevertheless still pounding the pavements. In September, the quest to buy back-to-school essentials helped keep the momentum up. Granted, the rate of slowdown in like-for-like sales is slightly steeper than that in retail footfall generally, according to the BRC-KPMG Retail Sales Monitor, which does show a greater reluctance to commit to a purchase. But together the two headline indices reflect the shift in consumer behaviour towards trading down and making more considered, better researched purchases, particularly over high-ticket items.
“The fact is that there are still many shoppers out on the high street, representing potential sales opportunities for everyone, particularly those with the most tempting offers. The challenge for retailers is making them shop with you rather than go elsewhere. This requires better, more intimate, knowledge of customers. It also means engaging with the ever-changing psyche of the shopper, and delivering offers geared at meeting their immediate needs and desires whilst working hard to retain their trust and their future custom too.
“In previous downturns we have learnt that in several sectors, especially food and fashion, shoppers inevitably become more price sensitive at such times. Crashing prices, though, is more a tactic to win a sprint than a marathon, and needlessly sacrificing margin is a sure-fire path to failure. We'll now begin to see retailers turn their efforts towards the 'make-or-break' season, cautiously taxiing up the long runway to Christmas. The wiliest of retailers will already have extensively reviewed and modified their seasonal plans, originally determined in somewhat more stable times.
“Consequently, I anticipate seeing much more creativity this year in the ways in which retailers attract custom. In contrast to this year's tortuous summer when shop windows were awash with Sales signs for months, I expect that retailers will deliver Christmas campaigns that will be less formulaic and more individually conceived around each brand's precise shopper insight. Time will soon tell how well each retailer has attuned its ears to the changing siren calls of customers.”