December starts slowly for highstreet retailers

Retail sales make sluggish start in December, says Synovate.

Synovate Retail Performance research has discovered that December has got off to a surprisingly sluggish start in the UK. The Retail Traffic Index (RTI) for Christmas Week One – w/c 29th November -recorded a decline of 4.1% against the same week of 2008 (w/c 30th November), but a rise of 7.5% on the previous week (w/c 22nd November 2009).

Synovate’s Dr Tim Denison explains, “Despite strong promotional encouragement, shoppers have not yet taken to the streets in the numbers that we have seen in times past. The trend to progressively later gift-shopping in the run-up to Christmas is well documented now; except that last year the surge could not have been left any later, which suggests these latest figures are a reflection of genuinely subdued shopping build-up.”

Shoppers have learnt over the last decade that leaving their buying until the last minute is generally rewarded with ever lower prices, except for certain must-have, short-supply gifts. This year though, the landscape is very different. Eager not to get stuck with excess produce, retailers have made sure stock piles are considerably lower than a year ago, which means that many more line items will inevitably sell out before Christmas. They had hoped that this message would see more shoppers on the high streets early this year, but our evidence from last week shows that shoppers have not changed their last-minute habits.

Story continues below
Advertisement

Denison continues, “In all honesty the slow start is much as we had expected; shoppers are obviously still sceptical about the retailers’ message. They seem prepared, last week at least, to gamble the future availability of goods against expectations of price cuts to come. It is a high risk plan to play though, this year.

“Despite the slow start, our forecast of a 1.8% rise in footfall on last year for the month as a whole is still on track and a solid Christmas is still on the cards. We believe that it is a matter of delay tactics rather than an indicator of decline in demand per se. The first week has been a little slower than retailers would have liked, but the 7.5% rise on the previous week is not insignificant and shows that Christmas is on its way.”

The impact of the continuing wet weather is likely to have persuaded more people to do their early shopping on-line. Those that did decide to brave it, will have been keen to make purchases, rather than simply do reconnaissance work, so we expect this to be reflected in retailers’ so-called ‘conversion rates’. It could also be that retailers’ ‘scarcity stories’ will gain some important traction online, if not yet in the shops.

There are exceptions to the ‘in-store’ gloom however. In London’s West End, where the streets were closed to traffic on Saturday and shoppers were treated to in-store entertainment, live music and giveaways, trading was reported as strong, although not at record levels, but shopper numbers were 7.4% down on the same event day last year, and not as reported elsewhere, up 33% on last year’s event which in any event enjoyed better weather and the same street closures. The wet weather this year certainly took a toll and put a dampener on the spectacle for the curious.

Elsewhere around the country, it was Wales, the South West and Scotland that performed poorest of all. Shopper numbers for the week were down by 11% year-on-year in Scotland and by 6.2% in Wales and the South West.

Authors

*

Related posts

Top