Out-of-town shopping hit by fall in spending

2 July 2008
A recent survey from credit experts Experian has revealed that Brits are cutting down on trips to out-of-town retail parks due to the rising cost of petrol.

In further bad news for shopowners, the survey also showed that consumers are increasingly using the internet for their shopping needs.

"The reduction in visits to out-of-town centres is having a significant impact on retail sales," said Jonathan de Mello, Experian’s director of retail consultancy. "People generally drive to out-of-town destinations with a specific large purchase in mind and there is far less browsing than is the case in town centres."

Areas with the largest distances to travel to major shopping locations - the eastern, south west and Wales, Scotland and Yorkshire regions - saw the biggest falls.

The figures seem to have been backed up by recent drops in sales - and share price - for retailers Marks & Spencer (M&S), Next and Sainsbury's. In fact, M&S has today issued a shock profit warning following the news that its first quarter same-store sales plummeted over 20% - a near seven-year low.

Further to this, John Lewis recently reported double-digit sales drops in its Bluewater and Trafford shopping centres, that were offset by healthy perfomances in its Oxford Street and online sales.

Consumer confidence

Experian also said its monthly footfall index showed shopper numbers fell 2.6% in June from the same month last year, and were down 5.8% to out-of-town destinations. The footfall data is somewhat of a grey area however, as it tallies the number of shoppers, but not how much they spend.

With consumer confidence at an 18-year low, Brits are becoming more reluctant to frivolously part with their money and are turning to online shopping in an attempt to get better deals, as well cutting expenditure on petrol.

UK internet traffic to retail websites was up 6.5% on the year, with trends showing that shoppers are searching for "sales" at the highest rate since Christmas.

Experian said there were 282 non-food retail bankruptcies in the three months ended May - up almost 25% on the year and suggesting a "dramatic acceleration" in business failures.

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