Investor Today

News Story

London retail's worst January for 5 years

Tuesday 16th February 2010

By Mike Jones

Retail sales in central London in January were 3.5% higher on a like-for-like basis than a year ago, when sales had risen 6.5%.

This was the worst January sales growth since 2005, according to the BRC-KPMG London Retail Sales Monitor.

Retail footfall in January fell well below its year-earlier level, to show the weakest January performance ever. Very cold snowy weather and less discounting than a year ago meant people made fewer shopping trips but it seems those that did get out spent more.

The stronger pound in January lessened London's price advantage for visitors from western Europe. Chinese visitors were still more numerous than last year, though the Chinese New Year falling later this year may have delayed sales for some.

Food sales benefited from the snow, as shoppers stocked up on basic essentials. Non-essentials and discretionary homewares struggled, though showed gains for some in clearance sales. Clothing, footwear and warm accessories were driven by the very cold and snowy weather.

Stephen Robertson, Director General, British Retail Consortium, said: "After an exceptionally strong December this growth is disappointing, but not disastrous. The wintry weather put people off going shopping in the first half of January and customers are becoming cautious again about spending when they don't have to. But London retail sales are still showing real terms growth and significantly outperforming the rest of the UK.

"The capital's retailers will be hoping these results are mainly due to bad weather, rather than any long-term return to concerns about personal finances, keeping consumers away from shops."

Helen Dickinson, Head of Retail, KPMG, said: "London, like the rest of the UK, suffered the effects of the dismal weather conditions as people stayed at home rather than trekking into the capital. As the month progressed, sales picked up considerably but it was not enough to take the month's performance anywhere near that of December. Although the results were flattered by the impact of higher shop prices, given the higher VAT rate in January 2010 compared to January 2009, this was less pronounced than in December. The underlying trend is difficult to read but there is no doubt that the strong sales we saw in December 2009 are not indicative of the trend for the rest of this year. London is likely to continue to outperform the rest of the country."

Have your say on this story using the comment section below