The Mann-Whitney U test is a nonparametric statistical test used to compare two independent groups when the dependent variable is either ordinal or continuous, but not normally distributed. It works by ranking all the observations from both groups together and comparing the sums of the ranks between the two groups. The student conducted traffic counts before and after a new retail development to test if there was a significant difference using the Mann-Whitney U test, calculating U values for each group and comparing them to the critical value at a 0.05 significance level. The test revealed a significant difference, suggesting the development impacted local traffic flows.