New Year bad tidings for retailers

January has seen shopper numbers plummet across the UK, according to the latest figures from Experian company FootFall. Further adding to the downcast mood, regional figures are consistent with the trend, with many regions showing even further falls. The Eastern England region saw the steepest decline, closely followed by the South West and Wales and Yorkshire and the Humber.

Martin Davies from Experian comments: 'With Britain’s increasingly tactical shopping resulting in more selective visit patterns, prompting the introduction of early discounts, the all-important trading period was a major disappointment for many retailers. Now, only a few weeks into 2008, as the full-priced spring stock hits the shop-floor following a month of mounted discounts, the retail outlook for the year ahead looks worryingly bleak - a sentiment which has also been reflected in this week’s trading statements from a number of key UK retailers.'

Andrew Burrell, Associate Director of Macroeconomics at Experian adds: 'Last week’s decision not to cut interest rates and speculation over further fuel cost rises has only added to the dampened mood on the High Street. This hasn’t been helped by a combination of the fact that borrowing costs are still much higher than a year ago, income growth is limited by the economic slowdown and the increasing gloom surrounding the housing market.

'Although further interest rate cuts are possible at the moment, it all depends on the inflation rate which is currently running above the Government target and even if rates do fall, it is doubtful whether this will be enough to entice shoppers and prevent a further weakening of retail demand.'

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