January 2014 is the first time since October 2009 that the RTI has recorded year-on-year growth in two consecutive months
For the second consecutive month, the number of shoppers entering non-food stores in the UK has risen year-on-year. Following the welcome, but modest 0.7% improvement in December, January’s Retail Traffic Index (RTI), published by Ipsos Retail Performance, rose by 3.3% on 2013.
“2014 has started very differently to last year, when there was little justification to be optimistic and footfall continued its downward slide month-on-month,” comments Dr Tim Denison, Director of Retail Intelligence at Ipsos Retail Performance. “January 2014 is the first time since October 2009 that the RTI has recorded year-on-year growth in two consecutive months, hinting that shoppers are beginning to get up off their knees.
“Heavy snowfall in mid-month curtailed shoppers’ expeditions last January, but retail footfall also rose in the first fortnight of this month against last year. It’s right to remain cautious; after all, disposable incomes are still under considerable strain and haven’t changed noticeably for some time. Nonetheless there’s a sniff in the air of sweeter times coming our way.”
The upturn in footfall is also reflected in other key consumer-based metrics. January’s retail sales figures posted in the BRC/KPMG Retail Sales Monitor saw total year-on-year growth of 5.1% in non-foods and 4.0% like-for-like. Demand in non-food retailing continues to be stimulated by price deflation which deepened to 2.7% in January, the highest rate since the BRC and Nielsen started producing its Shop Price Index.
Furthermore, the Ipsos MORI Economic Optimism Index - which canvasses 1000+ people each month and comprises the difference between the percentage who think the economy will get worse over the next 12 months and the percentage who think it will get better - stood at +20 at the start of February. The last time this index reached this level was when Prime Minister Blair and New Labour moved in to Downing Street.
“Aside from goods being well-priced and attractive to shoppers, the strengthening return of consumer confidence is now adding traction to the process,” says Denison. “Shoppers seem willing to spend a bit more as long as they are reassured that they are getting value for money, but we are a long way away from escape velocity, when discounting become redundant. One of the tricky challenges retailers will face later this year is how to wean shoppers off their everyday diet of price promotions. 2014 has started brighter than we had expected, the question is what growth rate is affordable to the UK shopper in the short term.”
Across the regions, there were contrasting fortunes. Notably, the strongest bounce backs came in those parts of the country most affected by heavy snow falls last year.
Footfall change: January 2014 vs January 2013
Scotland & Northern Ireland -1.1%
North of England +5.8%
The Midlands +6.1%
South West England & Wales +1.1%
South East England & London +2.6%
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About Ipsos Retail Performance
Ipsos Retail Performance provides footfall monitoring solutions, shopper tracking systems and in-store behavioural research to retailers worldwide. Its core products - Shopper Count, Shopper Interact and Shopper Engage – scientifically measure all aspects of a shopper experience from store entry to exit. It supplies national and international retailers with essential business metrics to drive accountability and performance improvement.
Ipsos Retail Performance is home to the Retail Traffic Index series, which for over 10 years has been the industry’s leading tracker of national, regional and sector retail footfall trends. It is also co-founder of the KPMG/Ipsos Retail Think Tank, offering thought leadership on the state of retail health and the future of retailing.
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