Non-food retail footfall over the Christmas period declined more than expected, according to research published today.
In market research firm Synovate Retail Performance’s latest Retail Traffic Index (RTI), high street footfall fell seven per cent year-on-year during December.
Thanks to the heavy snowfall at the start of the month the reduction was greater than Synovate’s prediction of a 4.2 per cent drop, as the growth in retail traffic between November and December was the weakest it has been for three years.
Director of Retail Intelligence at Synovate, Dr Tim Denison, said: “Retailers had high hopes that the impeding 2011 VAT increase combined with creative and competitive promotional campaigns would encourage people to make the most of the lower tax rate and the money in consumers’ pockets before the year end.
“Whether heavy spending featured in people’s intentions or not we shall never know. We had anticipated a ‘slow burn’ run-in to Christmas, not the ‘deep freeze’ it became.”
Footfall figures did improve during the last fortnight of the month, with traffic levels just 2.8 per cent down on 2009 during Christmas week.
The last week of 2010 was the year’s busiest, with footfall up nine per cent on the previous seven days but still three per cent down year-on-year.
Many retailers have this week reported affected trade due to the heavy snow in early December, even those like Next which is still meeting its profit targets.
Denison added: “2010 was the most unusual Christmas I have analysed in terms of retail traffic patterns. The weather turned everything on its head, disrupting shopping plans and behaviour.
“It suggests a reluctance on the shopper’s part to get carried away with the moment and an underlying weakening in their appetite to shop that can only be exacerbated as the higher VAT rate is introduced on January 4th.
“These are anxious times for retailers particularly in sectors such as high street fashion, where raw materials inflation is pushing prices higher, irrespective of the VAT increase.”
Non-food retail traffic for the full year decreased by 3.6 per cent, with rather ominously the year-on-year negative gap widening every month since August.