SPSL News

Retail research group SPSL's Retail Traffic Index T (RTIT) for July, released today, shows signs of improvement over recent months. The number of shoppers in July was down by 2.5% on the same month last year, but up a healthy 11.5% on numbers in June this year. After April's figures, in which Easter fell this year but not last, they are the strongest of 2006.

Commenting on the rise, Dr. Tim Denison, Director of Knowledge Management at SPSL said; "The end of the World Cup, the start of a hot summer and the school holidays could not have come soon enough for retailers in the UK this year. Encouraged by the universal presence of summer Sales, shoppers were back out in numbers in July. Bear in mind though that July 2005 was a quiet month, on the back of the London bombings and the air of nervousness that was created nationwide.

"There is some sense that after a period in which the engines were set full astern, the consumer spending supertanker has now slowed down and found its new cruising speed. It's not full ahead but at least it's moving forward. We have seen the year-on-year decline in retail footfall improve from -6.1% in Q1 to -4.3% in Q2 and our expectations for the rest of the year are that the RTI will now plateau at about 2 points below 2005.

"We are reaching a state where the slowdown in consumer spending is being tempered by the more resilient consumer. Shoppers, no longer actively avoiding expenditure, seem to be more accepting of the constraints imposed by high debt levels and ongoing pressures on their disposable incomes. Retailers too, seem more attuned to the challenges of a slower rate of growth, somewhat choosier customers and the quest to preserve margins. These are the new realities of retail in 2006.

"This new sense of balance should not be confused with stability. With economic growth above trend, a tightening of credit terms and still rising energy bills the possibility of another tipping point is never too far away.

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