SALES AT RISK FROM AUTUMN TOURIST TAIL-OFF

10 September 2007

• Retail sales in Central London in August were 9.8% higher than a year earlier, on a like-for-like basis, a good gain on top of the 22% year-on-year increase in August 2006, when sales were recovering from the July 2005 bombings. 
• Retail footfall remained lower than a year ago, according to SPSL, but the decline was against a very strong increase last August. Strong sales but lower footfall further confirms anecdotal evidence of people making fewer trips to London shops, but spending more while they are there.
• Visitor numbers remained higher than a year ago. Overseas spending was led by Middle Eastern shoppers, followed by Russians, other Eastern Europeans and Western Europeans. The weakness of the dollar continued to restrict North American visitors’ spending power.
• Clothing and footwear sales picked up after slowing in July but heavy discounts were often needed to clear summer stock. Designerwear and accessories remained popular, especially with overseas visitors. Homewares and furniture fell back from July’s clearance gains. 

Kevin Hawkins, LRC Director, comments:

“Another excellent result, driven primarily by the summer’s boom in tourism and some price-led offers in major London stores. The acid test will come in the late Autumn when tourism declines and we are back to our home base.”

Helen Dickinson, Head of Retail, KPMG, comments:

“Although the weather was better in August, it was always going to be a challenge for retailers in central London to maintain the extraordinarily strong growth rates seen in June and July.  However, 9.8% like-for-like growth for the month is a highly creditable performance and re-emphasises how London continues to outperform the rest of the UK as a whole.  There remains significant variation in performance of individual retailers.”