The latest figures from the Retail Traffic Index have shown that shopper numbers in September were down 0.5 per cent year on year and had fallen 8.9 per cent from August.
The figures also show that Q3 growth stagnated after showing promise in Q2. Growth had reached 2.2 per cent earlier this year after a fall of 0.9 per cent in the first quarter of 2007.
Credit fears are believed to have exacerbated the stagnation as the director of Knowledge Management at research firm SPSL, Dr. Tim Denison explained: I think many retail analysts will be forced to admit that shoppers have been more resilient for longer into this year than we had expected. That said, it's difficult to forecast anything other than a challenging next quarter for the retail industry.
"Our data strongly suggest that the gap in the number of shopping trips being made to non-food outlets over the remainder of 2007 versus 2006 will worsen progressively by 0.5% each month, leading to a 2% year-on-year fall in December. Despite this bad news for retailers, the expected decline in shopper visits will actually be less than it was in Q4 2006 compared with Q4 2005 (down 3.1% then). However, it will come at a time when many retailers are feeling the strain of a particularly difficult trading year.
"It should be remembered that this time last year the talk was all about the tightening credit squeeze on consumers and the growing insolvency levels. Twelve months on and the topics occupying the thoughts of economists and city analysts are still much the same, but the situation is just that little bit more acute."
"There is a certain inevitability in the toughening conditions confronting retailers, but there is no industry sector more irrepressible in this country than retailing. Christmas 2007 more thanany other of recent times will be all about getting the basics of product, value and service right, delivering what the customer demands, and executing it that little bit better than before.
"Our experience is that retailers now more than ever are applying strict analytical disciplines to their businesses and leaving very little to chance or 'creative hunches'. They know increasingly that they cannot afford to make even one costly mistake with product, pricing, marketing or staff."