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But a downturn may be on the horizon

Shopper numbers up

The latest Retail Traffic Index from research group SPSL reveals that June saw retail footfall rise by three per cent year-on-year and by 4.4 per cent on May. Q2 numbers were up 2.2 per cent against 2006, a reverse of the 0.9 per cent drop recorded for Q1. But the underlying message is not quite as simple as it first seems.

According to Dr. Tim Denison, Director of Knowledge Management at SPSL: “At first sight June’s figures look remarkably healthy, but we have to bear in mind that June 2006 was a weak month for retail footfall in the non-food sector. England’s matches in the football World Cup took centre stage last June."

“Generally though, Quarter Two has proven to be stronger than Quarter One, despite the squeeze tightening on the consumer’s disposable income. People seem happy to simply carry on living for the moment, rather than to save for a rainy day.

“Moving into Quarter Three, I genuinely believe that we are sitting on the cusp of a gentle downturn," warned Denison. "Retailers will probably be praying that the pound remains strong against the dollar to help preserve margins on third-world sourced goods, but they should now expect that consumer demand will begin to noticeably weaken."

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