UK retail footfall dropped unexpectedly in September, with weekly average traffic -6.9% lower than in August. The month also rounded off Q3, in which footfall fell back by -4.1% compared to 2016, following a revival in Q2 when the deficit stood at only -1%.

Ipsos Retail Performance's Retail Traffic Index (RTI) is derived from the number of individual shoppers entering over 4000 non-food retail stores across the UK. The RTI shows that the reduction in shoppers has now grown for the fourth consecutive month, a signal that consumers are increasingly becoming more cautious with their disposable income.

“Discretionary spending in stores is the area in which consumers seem to be pulling back”, comments Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance. “Recent trading results from retailers such as DFS and B&Q, coupled with news of a slowdown of new car registrations, indicates that consumers are thinking twice before committing to buying big ticket items.”

Ipsos Retail Performance also compiles The Conversion Rate Tracker, which measures the percentage of stores that deliver a conversion rate gain on the previous year. In Q3 it showed an improvement of +2.6% on the previous quarter amongst non-food retailers – 45.2% of non-food stores sampled had improved their conversion rate.

Dr Denison continues: “The expanding number of stores recording conversion rate improvements on last year indicates that sales are not suffering as badly as footfall in all sectors. Shoppers are becoming more judicious when it comes to the non-essentials, but demand for budgeted items such as clothing and footwear remains robust.

“Various economic data sets are continuing to conflict with one another, making it far from simple to paint an accurate picture of the strength and direction of consumer spending. Strong employment and robust retail sales point in one direction, while shrinking disposable income and faltering footfall points in another. It suggests that the state of retail remains frail.

“The impending interest rate rise will only make life more turbulent for retailers, as their margins remain under considerable pressure – and it will become increasingly difficult to pass rising costs onto the consumer. The key focus in the coming months will continue to be improving efficiency across all parts of the business that can be directly managed and controlled.”