For the second month in a row, retail footfall was up on last year according to the first of the key indicators to be released. The Retail Traffic Index from research group SPSL, released today, saw April shoppers numbers up by 2.6% on April 2006, which also had Easter in it last year, and up by 11.4% on March. According to Dr. Tim Denison, Director of Knowledge Management at SPSL and leading retail psychologist; “We had forecast a stronger month than last year, given the weak Spring and, in particular, the poor Easter of 2006, but we are surprised by the amount of uplift.
“These latest monthly figures, the first of the key indices out each month, serve to underline that the consumer’s appetite to go shopping and spend has not yet been undermined by the recent interest rate rises. The weak dollar has definitely helped too. With many goods worldwide being priced in dollars, retailers have been able to pass some of the benefit on to shoppers. Homeowners, in particular, still feel happy to shop and will probably continue to do so until house price rises and interest rates come closer into line.
“The recent reports released by Idea global and the Centre for Economics and Business Research respectively expecting house prices to grow by 5% this year and by just 2% in 2008 indicate that such a realignment is in hand. But if these strong April retail traffic results are matched by sales, some might look to the MPC to increase the base rate by 0.5% next time around, instead of 0.25%, hoping that a short, sharp shock will have greater impact on inflation than a steady tightening. However, such a decision would not be in character with its past and would likely only serve to heighten concerns unnecessarily about an overheating consumer economy.”
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