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Leading retail analyst Dr Tim Denison has predicted that the UK High Street is nearing the worst of the recession, and that there are signs that the sector will soon see an upswing in sales.
"We might be approaching the end of the worst of the downturn and that alone should give the retail industry a whiff of a reason to be more optimistic about the future," commented the retail psychologist at footfall expert Synovate.
He said though the latest Retail Traffic Index showed a footfall decline of 0.2 per cent in March; the decline is actually an increase due to Easter falling early in 2008. Footfall was also up 4.2 per cent over Febuary, according to the research firm.
"Our prediction is that we can expect the shops to be busier still in April with the first year-on-year growth (of +0.7 per cent for the full month) in shopper numbers since August 2008," he said.
However, he conceded that there were still problems convincing shoppers to spend their money. "We are still seeing in March that the proportion of shoppers who buy, the so-called ‘conversion rate’, is suffering in these fluid times."
There were also signs that consumers were doing a lot more research into prices and alternatives before settling on the final purchase. "There is a sense that shoppers have raised their due diligence standards, making more store trips and product/price comparisons before settling on a purchase."
The other positive was that disposable income was up 20 per cent on last year, according to Denison. "The fact is that for some consumers their levels of disposable income are up by as much as 20 per cent in 2009, largely due to lowering interest rates on home loans.
"However, so far, we have seen little evidence of this trickling through to retail outlets with many shoppers responding to constant downturn news like rabbits in the headlights; being scared off from spending on anything but essentials."
