UK stores may be emptier but this retail cloud has a silver lining says Ipsos Retail
You can take the latest Ipsos Retail Traffic Index (RTI) in one of two ways depending on whether you’re feeling particularly upbeat of slightly depressed. But that’s the thing about UK retail at the moment, the strength of the sector is still a tough one to call.
So what did the RTI released late Thursday show us about September? Retail footfall at 4,000 non-food store fell by a surprisingly large 5.5% year-on-year and it fell an even worse 6.9% compared to August. Ouch.
That helped push Q3 footfall overall down 4.1% even though Q2 had seen it staging something of a revival with only a 1% dip.
So, a mix of economic uncertainty and the on-going migration to e-shopping, seem to be having a big effect. But where’s the good news in all this?
Well, it’s interesting that the percentage of stores that improved their conversion rates rose 2.6% to 45.2%, compared to the previous quarter. There may be fewer shoppers in stores but those that are there have a higher intention of purchasing and seem to know what they want. Online could be helping out here as shoppers do their research on the web first and then go in-store to touch, feel, try on and get their product instantly, without having to wait indoors all day for a delivery.
That could also mean that those shoppers turning up at physical stores spend less time there. We all know that increasing dwell time is a good thing if it leads to higher sales, but if a store gets the sale anyway from customers who hit and run, then short visits are good too.
Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance said: “The expanding number of stores recording conversion rate improvements on last year indicates that sales are not suffering as badly as footfall in all sectors. Shoppers are becoming more judicious when it comes to the non-essentials, but demand for budgeted items such as clothing and footwear remains robust.”
In terms of the region seeing the biggest footfall drops, London and the South East led the pack with visitor traffic down 8.6% overall in September year-on-year and 9.6% compared to August. But all regions fell both year-on-year and month-on-month.
“Discretionary spending in stores is the area in which consumers seem to be pulling back”, Dr Denison added.
“Recent trading results from retailers such as DFS and B&Q, coupled with news of a slowdown of new car registrations, indicates that consumers are thinking twice before committing to buying big ticket items.”
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