So what conclusions can we draw from this apparent dichotomy? First, if retailers are getting more business out of a smaller number of customers then it implies they've sharpened up their acts and are achieving better conversion rates. But what the index doesn't show is what retailers had to do to achieve increased volume. Have they upped their ad spend to bring in more shoppers? Have they cut their already thin margins further by going on Sale two weeks before Christmas?

A bit of each is probably the answer. The power of advertising is highlighted by the relative fortunes of Marks & Spencer and Next. M&S spent £100m on advertising last year, while Next spent next to nothing and is only belatedly jumping on the bandwagon with a £10m campaign. Of course it's not only down to marketing, but which retailer's doing better?

And it seems margins have held up surprisingly well, with a different set of research from the BRC showing that retail price deflation is actually slowing. In fact, this could have been a factor in the Monetary Policy Committee's shock decision to increase interest rates this month.

What does this mean for the shopping centre industry? First, it implies that pedestrian counting is now an even more unreliable proxy for sales data than it has been in the past. Of course it's a valuable management tool but if centre owners and managers are really going to support their retailers' business plans they need the hard numbers.

And it's good news for retail developers. With 4 million sq ft of new shopping centre space being delivered this year, and more than 10 million sq ft due next year in the biggest development boom the industry's ever seen, any signs of a retail recovery will be welcomed by nervous letting agents.

Graham Parker, Editor

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