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May 30 2008
Footfall fall, online vouchers rise
Latest Hitwise figures show online shoppers are becoming more price conscious, while high-street sales continue to fall
Online shoppers have started to become more price conscious, according to the latest data from Hitwise. Over the last 12 months, UK Internet visits to mid-market online retailers have fallen by 6%, while visits to retailers that are more popular with price conscious consumers, such as the clothing store Primark and traditional catalogue retailers, have increased by 12%. However, high-end retailers have yet to feel the pinch. Hitwise’s index of UK Internet visits to 100 high-end retailers, which includes Harrods and Selfridges, increased by 14% over the last 12 months.
“Consumers are also becoming more price conscious in their Internet search habits,” according to Robin Goad, Research Director at Hitwise. “UK Internet searches for ‘vouchers’ have quadrupled over the last 12 months. For the four weeks ending May 17th, the top UK search term containing the word ‘vouchers’ was ‘discount vouchers’, while other popular terms include ‘money off vouchers’ and ‘free vouchers’.
“Our search data shows that people are concerned about both the economy and rising prices and looking for cheaper alternatives,” adds Robin Goad. “This is also reflected in the growth of budget retailers and an increasing propensity for consumers to browse multiple retailers to find the right price before making a purchase.”
May saw a 1.5 per cent decline in shoppers visiting the high street, compared to last year, as the effects of the credit crunch and economic slowdown begin to impact on spending. May has always been a slow month compared with April, but this year has been especially difficult with 3.4 per cent fewer shoppers than in the previous month.
“Rising living costs are starting to bite into disposable incomes and, with below-inflation wage settlements revealing themselves in monthly pay packets, people are now experiencing the financial reality of economic slowdown,” comments Matt Sherwood, senior economist at Experian.
“Retail sales surprised by coming in on the high side during the first three months of 2008, expanding by 1.9% during the quarter. This was backed up by first quarter GDP data released last week suggesting that consumers have been undaunted by the credit crunch. But we believe this is a last dance before the party fizzles out and retail sales are expected to soften considerably over the rest of the year.
“We expect a soft second half of 2008 and a slow beginning to 2009 will see retail sales volumes grow by just 1.3% next year, the slowest pace since 1995. It would not take much to see retailers post their worst performance since the early 1990s.”
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