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London retail growth worst for two years

Monday, 10 December 2007

Retail sales in London in November were 0.4 per cent higher than a year earlier, on a like-for-like basis, the weakest since October 2005.

This compared with an 8.5 per cent year-on-year increase in November 2006, when sales were recovering from the July 2005 bombings.

The figures, released by the British Retail Consortium (BRC) and KPMG, show that retail footfall slowed in November, falling just below its year-earlier level, as in the UK as a whole, after two months of stronger growth.

Europeans remained the main spenders, while both American and Japanese visitors continued to be discouraged by the weakness of the dollar and the yen.

Clothing and footwear sales continued to struggle in the mild weather, though designer fashions remained strong. Premium beauty products did well, but furniture and homewares were slower, mainly discount-driven and with larger purchases affected by increased consumer caution.

Kevin Hawkins, LRC Director, said that the figures did not bode well for the run-up to Christmas.

“Customer footfall was well down on last year. The widespread discounting by certain department stores, while boosting their sales, seems to have had little overall impact on the average performance. The recent reduction in interest rates has come not a moment too soon,” he added.

Helen Dickinson, KPMG’s head of retail, pointed out that the Central London figures showed continued volatility, with a flat 0.4 per cent like-for-like, compared with 11 per cent in the previous month.

“This is the lowest rate of growth for the Capital since October 2005, with varying results reported by retailers over the course of the month. Many will be hoping that the recent interest rate cut will raise consumer cheer with a last minute surge at the tills in December,” Dickinson said.

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