EUROSHOPPERTRENDS REPORT

Bringing you the latest consumer behaviourtrends throughout Europe.

Each quarter, FootFall analyses thousands of retail outletsacross 10 countries.

www.footfall.com + 44 (0) 121 711 4652

QUARTER 3, 2014

Executive Report SummaryQuarter 3 2014

Each quarter, FootFall analyses thousands of retail outlets across 10 countries to bring you the latest consumer behaviour trends throughout Europe.

In Quarter 1 2014, we saw an increase in smartphone usage negatively impacting retail

In Quarter 3, several regions gained in confidence, which increased both footfall and retail sales. However, economic uncertainty within the Eurozone held back improvements across the continent as a whole. Switzerland recorded the greatest improvement in quarterly footfall during Q3, while Poland continued to struggle. This marked the third quarter in succession that Poland recorded the largest footfall decrease. Germany, France and Spain also struggled due to stagnation within the Eurozone.

European Index Average Change for Q3 Year-on-Year-0.06%

Analysis of Footfall % Change:Year-on-Year for Q3 2014

In Quarter 3, several regions gained in confidence, which increased both footfall and retail sales.

---------- FootFall EuroShopper Trends Report Q3 2014 ----------

Country Jul Aug Sept Q3 Q2 Q1Switzerland 7.5 2.0 -0.5 3.1 -3.1 -1.8

Austria 2.9 3.5 -1.7 1.6 -3.7 -0.7

Italy 5.3 -0.9 -1.8 1 -0.6 -0.7

Rep. of Ireland 1.3 0.3 -1.8 0 2.2 1

Portugal -0.5 -0.4 0.1 -0.3 0.5 2.5

France -0.5 -1 0 -0.5 -2.3 -2.4

Germany -0.2 2.6 -3.9 -0.7 -3.3 -4.6

Spain -1.9 0.8 -0.8 -0.7 0.8 -1.9

UK -0.2 -0.5 -1.7 -0.8 -0.9 0.4

Poland -4.5 -1 -4.4 -3.3 -8.1 -5

European IndexJuly to September 2014

Analysis of % Change Year-on-Year

CommentaryAfter years of economic austerity, the green shoots of long-term retail recovery are beginning to be felt across Europe. Three in ten of the countries monitored – Austria, Italy and Switzerland - experienced footfall improvements during Quarter 3, with economic stability improving consumer confidence and spending. However, these encouraging results are far from continent-wide, as six regions – France, Germany, Poland, Portugal, Spain and the UK - experienced a quarterly footfall decline. Only Ireland maintained consistent retail activity Year-on-Year.

After a disappointing second quarter, in which footfall decreased by -3.1%, Switzerlandexperienced an activity turnaround during Q3. The country was the strongest

during the three month period. This supported a peak in retail sales during August, although activity slowed during September due to decreasing imports and oil prices.1 Italy and Austria also experienced quarterly footfall improvements, led by strong results in July. Both countries benefited from European Central Bank measures to stimulate the Eurozone. In Italy, however, this did not solve economic concerns.

---------- FootFall EuroShopper Trends Report Q3 2014 ----------

Despite weakest in September, Switzerland was the strongest performer in the last quarter.

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Austria France Germany Italy Poland Portugal Rep. of Ireland Spain Switzerland UK

Jul Aug Sep

As a result, retail sales did not rise during the quarter, showing cautious consumers were browsing, not buying.2 It is worth noting, though, that Italy’s position has improved since the same period last year, as it posted a -3.9% footfall decline during Q3 2013.

On the other hand, Austria’s Q3 results remains relatively consistent with its performance over the past year. It posted footfall increases during the second half of 2013 and the first quarter of this year, only experiencing a slight dip during Quarter 2 2014.

After topping the table the previous quarter, Ireland equalled its 2013 footfall figures during Q3. Importantly, this marks the third consecutive quarter in which the country has posted either an equal or improved result. Ireland is now the leading Eurozone nation in terms of output growth,3 while private sector activity is rising at its fastest pace in 14 years.4

At the other end of the scale, Poland’s woes continue as it posted Europe’s biggest footfall decline for the third consecutive quarter. The country’s agricultural sector

contributed to retail sales falling at their fastest pace in three years.5 Unrest between Russia and Ukraine has impacted the country for several months now, and frosty relations between Poland and Russia are unlikely to be resolved quickly. Consumer confidence within the country remains low, with only 13% of the Polish population predicting an upturn in economic fortunes over the next six months.6

---------- FootFall EuroShopper Trends Report Q3 2014 ----------

Ireland is now the leading Eurozone nation in terms of output growth.

European IndexAnalysis of % Change Year-on-Year

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Austria France Germany Italy Poland Portugal Rep. of Ireland Spain Switzerland UK

Q3

---------- FootFall EuroShopper Trends Report Q3 2014 ----------

The UK also underperformed, recording a -0.8% footfall decline compared to Q3 2013.

despite sales figures rising during July and August due to a heatwave.7 Unfortunately the forecast worked against retailers during Quarter 3; September was a particularly

first time in seven months.8

Q3 saw footfall declines in Germany and Spain, both of whom experienced economic

result this year, as a sharp fall in exports has led to the economy stagnating.9 Consumer confidence is declining, and retail sales have fluctuated greatly month-on-month as a result.101.2% for the rest of the year. For 2015 the forecasts have been cut further from 2% to 1.3%.

Although Spain’s expansion outpaced the Eurozone average, retail activity was impacted by high unemployment levels.11 The result is particularly disappointing for Spain considering it posted a +0.8% footfall improvement during the previous quarter.

for the quarter was down -0.5% on the same period in 2013 – and marks the third quarter running in which Year-on-Year footfall has been in decline.

Portugal will be a region to watch during Q4 as, despite recording a -0.3% footfall decline during Quarter 3, its fortunes are on the up. The country progressed from

generating an increase in quarterly retail sales.12 The country has fared much better than neighbouring regions in recent months, having posted a footfall improvement of +0.5% during Q2.

For more information, or to find out how people counting and retail site analytics can support your business growth, email: information@footfall.com or call +44 (0) 121 711 4652

1. http://www.nasdaq.com/article/swiss-retail-sales-rise-19-in-august-cm3988892. http://www.tradingeconomics.com/italy/retail-sales-annual 3. http://www.irishtimes.com/business/economy/ireland-leads-recovery-in-euro-zone-industrial-output-1.1926804 4. http://online.wsj.com/articles/spains-service-sector-expands-at-fastest-pace-since-2006-1409730902 5. http://uk.reuters.com/article/2014/09/23/poland-cenbank-belka-idUKL6N0RO22Y20140923 6. http://ipsos-na.com/news-polls/pressrelease.aspx?id=6601 7. http://uk.reuters.com/article/2014/09/09/uk-britain-economy-retail-idUKKBN0H32EI20140909 8. http://uk.reuters.com/article/2014/09/25/uk-britain-economy-retail-idUKKCN0HK11J20140925 9. http://www.bbc.co.uk/news/business-29549547 10. http://www.marketwatch.com/story/german-retail-sales-rise-in-august-2014-09-30 11. http://www.theolivepress.es/spain-news/2014/10/08/update-spain-is-the-only-eu-country-with-improving-economy-says-imf/ 12. http://www.tradingeconomics.com/portugal/retail-sales

Portugal will be a region to watch during Q4.

---------- FootFall EuroShopper Trends Report Q3 2014 ----------

Yorke HouseArleston WaySolihullB90 4LH

www.footfall.cominformation@footfall.comT: +44 (0) 121 711 4652@footfallinsights

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