LONDON’S JAN SALES GROWTH HALF 2007 AVERAGE

18 February 2008

• Retail sales in Central London in January were 3.7% higher than a year earlier, on a like-for-like basis, well below the 6.6% annual increase in January 2007 and the 6.2% fourth quarter 2007 average. 
• Retail footfall showed a modest improvement from December, but remained lower than a year ago and weaker than in the UK as a whole. Footfall slowed again after the clearance sales.  
• Western and Eastern Europeans remained the main shoppers, while American and Japanese visitor numbers were still down on a year ago, hit by the weakness of their currencies. 
• Heavy discounting in clearance events helped drive sales growth. Clothing and footwear sales remained difficult for most, though fashion accessories were popular. Premium beauty held up well, but homewares, especially larger purchases, continued to be hit by weak consumer confidence.

Stephen Robertson, Director General, British Retail Consortium, said:

“London’s January sales growth was the second weakest annual growth since November 2005. Widespread price cuts gave a boost to clothing, footwear and small homeware items, although usually at the expense of margins.  Last week’s rate cut has come at the right time but, given these figures, more cuts will be needed to encourage London’s shoppers to spend and ensure the slowing economy lands softly.”

Helen Dickinson, Head of Retail, KPMG, said:

“London continues to outperform the UK as a whole.  However, the like-for-like growth of 3.7% is the lowest for over two years (excluding November 2007, which was seen as a temporary blip), and well below the average London growth rate of 8% in 2007.  It marks the beginning of a year where the comparatives for London are strong and hence will be increasingly difficult to beat as the year progresses - we can therefore expect a trend of lower growth in the coming months as the economic conditions become more challenging