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3 December 2008 Discounts ‘fail to tempt’ shoppers

New data reveals consumer activity declined during November - despite heavy discounting by retailers.

Many large stores have launched a wave of price wars in recent weeks to stimulate spending over the festive period and counteract the impending recession. However, research from consultancy group Experian suggests this has failed to boost shopping numbers.

The Experian Retail FootFall Index fell 0.9% last month, compared with the same period last year. Scotland was the hardest hit, recording a 5% drop in retail footfall.

‘From a UK wide perspective, it seems efforts at deep discounting have failed to attract significant shopper numbers into the stores,’ said Jonathan De Mello, director of retail consultancy at Experian.

‘The spectacular events held at the end of the month provided some spikes in shopper numbers but levels have quickly dropped back.’

Experian said the number of retail business failures has also accelerated, rising by 21% in November for non-food retailers and by 50% for food retailers.

Last month the Chancellor announced a 2.5% cut in VAT in an attempt to boost consumer spending. The new lower rate of 15% is effective from 1 December 2008 to 31 December 2009.