Breaking finance and business news, tax information, jobs and more for finance directors and senior finance professionals.

The Retail FootFall Index (RFI) for last week shows a week-on-week decrease of 4.4 per cent and an overall decline in shopper numbers of 1.4 per cent compared to 2007.

All regional figures for the week are consistent with the trend, with many regions showing even further falls. 

Faring the worst, the Eastern England region saw a 3.5 per cent decline in shopper numbers compared to the same period last year, closely followed by the South West and Wales (-3.0 per cent) and Yorkshire and Humber (-2.6 per cent).

Martin Davies from Experian said that Britain’s increasingly tactical shopping had resulted in more selective visit patterns, prompting the introduction of early discounts. He added that the all-important trading period was a major disappointment for many retailers. 

“Now, only a few weeks into 2008, as the full-priced spring stock hits the shop-floor following a month of mounted discounts, the retail outlook for the year ahead looks worryingly bleak - a sentiment which has also been reflected in this week’s trading statements from a number of key UK retailers,” Davies concluded.

Borrowing costs 

Andrew Burrell, associate director of Macroeconomics at Experian added that last week’s decision not to cut interest rates and speculation over further fuel cost rises had only added to the dampened mood on the High Street.

He said that this hadn’t been helped by a combination of the fact that borrowing costs were still much higher than a year ago, income growth was limited by the economic slowdown and the increasing gloom surrounding the housing market.

“Although further interest rate cuts are possible at the moment, it all depends on the inflation rate which is currently running above the Government target and even if rates do fall, it is doubtful whether this will be enough to entice shoppers and prevent a further weakening of retail demand,” Burrel said.

Official figures released by the Office for National Statistics on Friday confirmed a slowdown in retail growth.  The sales volume in the three months October to December rose by 0.4 per cent compared with the previous three months.

This follows 1.0 per cent growth in the three months to November. Three-monthly growth in sales volume was 0.3 per cent for predominantly food stores, while no growth was reported for predominantly non-food stores.

Largest fall since 2005 

Three-monthly growth was reported in each sector of retailing except for non-specialised stores, which includes department stores, where sales fell by 1.6 per cent. This is the largest fall for this sector since July 2005 (-2.9 per cent).

Sales in non-store retailing and repair rose by 4.4 per cent, the largest growth for this sector since October 2006 (6.2 per cent).

Total sales volume in the three months to December was 3.6 per cent higher than the same period a year ago. Sales volume for predominantly non-food stores rose by 4.4 per cent.

Sales volume for textile, clothing and footwear stores was 1.0 per cent higher than the same period a year ago, the smallest growth for this sector since February 1999 (0.3 per cent). Sales volume for predominantly food stores rose by 0.9 per cent.

Total sales volume decreased by 0.4 per cent between November and December. Sales volume for predominantly non-food stores decreased by 0.9 per cent.

Sales volume for non-specialised stores (which includes department stores) decreased by 4.3 per cent, the largest decrease for this sector since February 1994 (-4.8 per cent). Sales volume for predominantly food stores increased by 0.1 per cent.

The non-seasonally adjusted value of retail sales for the three months to December was 2.3 per cent higher than in the same period a year earlier.

The average weekly value of sales in December was £6.8 billion, 1.4 per cent higher than in December 2006.

Sales by predominantly food stores rose by 2.4 per cent over the year, compared with no growth for predominantly non-food stores and 10.0 per cent growth for non-store retailing and repair.

Sales by household goods stores fell by 2.1 per cent, the largest fall for this sector since March 2006 (-4.2 per cent).

Related articles

• Slump in expected activity pushes retail financial services towards recession
• Consumer confidence remains subdued
• Negative retail statements at two-year high
• Consumers steer clear of major purchases

Related links

• Experian
• Office for National Statistics