Snow hits retail sales

UK footfall figures reveal January 2010 has been the worst start to a new year for retailers in half a decade.
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According to Synovate’s Retail Traffic Index the number of shoppers in non-food stores over January was down by five per cent year-on-year. This is the biggest drop since January 2005 when it was down by 5.2 per cent.

For the second month running and only the second time this decade, none of the regions showed a year-on-year rise in store traffic. The month-on-month fall of 27.5 per cent against December was slightly better than forecast.

Synovate analyst Tim Denison explained: “2010 has kicked off desperately slowly for retailers, lending support to retailers’ concerns that, despite a strong Christmas, it’s going to be another tough year on the High Street. The tumble has been accentuated by a number of clear factors.

“In terms of damage to the national footfall figures, it was the heavy and persistent snow falls across many parts of the country during the month that had the most impact, giving retailers the worst possible start to the year.

"When advised to travel ‘only if essential’, recreational shopping failed to fit the bill, adding to retailers’ woes. At its worst on the 6th, numbers were down 30 per cent nationally, and for days after the scene was little better.

“Last January, in the midst of recession, retailers were fighting another battle. In an effort to clear unwanted stockpiles, they were discounting aggressively to tempt reluctant shoppers. Not so this year; some retailers have even had to bring lines forward to fill Sale areas that we emptied in December. Given the trading strength last month and with stock management under better control, many retailers chose not to stimulate demand heavily this month.

“Finally, the increase in VAT rate at the start of January injected impetus into December’s trading, but at the expense of this month’s footfall. Though, in fact, prices have remained largely unchanged, with retailers taking the hit, consumers didn’t take the chance and many decide to buy before the rise was imposed."

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