The FootFall shopping centre index (UK)
Published: 16 March, 2006
February's footfall numbers revealed a 5.4 per cent decline in growth, y-o-y. This downward trend has persisted since July 2005. Analysts have citied increased internet usage and, more recently, the cold weather, as possible reasons for the fall in shopper numbers.
More significantly, Bank of England Governor Mervyn King has highlighted the squeeze on disposable incomes brought about by higher spending on non-discretionary items such as mortgage interest payments, petrol and utility bills.
However, we maintain our view that the worst of the retail downturn is now over. Our latest projections are for a further pickup in underlying growth over the coming months, with an annual increase of 2.7 per cent forecast for the year as a whole. Although weak by historical standards, this is an improvement on 2005.
Evidence that retail demand is stabilising is likely to weigh against the Monetary Policy Committee (MPC) cutting interest rates further in the near term, despite inflation slipping below the 2.0 per cent target in recent months
Commentary by Experian
