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Snow keeps shoppers at home in January

Published: 3 February 2010
January 2010 sees the worst start to a new year for retailers in half a decade, as footfall drops 5%.
Snow keeps shoppers at home in January
Hit by the heavy snow, January 2010 saw the number of shoppers in non-food stores drop 5% compared with the same month in 2009 - itself badly affected by the recession. According to the latest UK footfall figures from Synovate Retail Performance, not since January 2005, when it was down by 5.2%, has the year-on-year decline been so great.

The cold spell experienced across the UK also meant that none of the regions showed a year-on-year rise in store traffic. However, the month-on-month fall of 27.5% against December was slightly better than forecast.

Synovate analyst Dr 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."

He continued: "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% nationally, and for days after the scene was little better."

The VAT increase was also a contributing fact. Synovate explained that, while it injected impetus into Decembers' trading, it was largely at the expense of January's footfall. However, prices have remained largely unchanged, with non-food inflation up to 1.9% in January, compared with 1.4% in December.

British Retail Consortium (BRC) director general Stephen Robertson said: "January's Vat increase was lost among a huge number of discounts and promotions. We would have expected non-food inflation to be higher because of the Vat reversal, but many shops held off on passing the extra costs on. Fierce competition in the face of weakening consumer demand and uncertainty about the recovery, is keeping shop prices down."

Looking forward, Dr Denison said: "The big questions are how strong is underlying demand now, if we take away these extraneous factors, and how robust will it be in the months ahead? At present it's difficult to tell. Consumer confidence remains weak with public spending cuts, rising unemployment and personal tax increases all threatening to do further damage."

He added: "Officially, the recession may be over but retailers know that it may not even be in abeyance and their strategists will be working out their next plays to keep the tills ringing and to limit the damage."

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