MORE TOURISTS, MORE DISCOUNTS

13 August 2007

• Retail sales in Central London in July were 11.6% higher than a year earlier, on a like-for-like basis, a good gain on top of the 15.1% year-on-year increase in June 2006, when sales were recovering from the July 2005 bombings. 
• Retail footfall fell further below year-earlier levels, according to SPSL, but the decline was against a strong gain last July. Strong sales but lower footfall further confirms anecdotal evidence of fewer shopping trips, but higher average transaction values and a growing use of the internet.
• Visitor numbers were higher than a year ago. The usual summer increase in visits by Middle Eastern tourist shoppers shifted the lead from Western Europeans as the main spenders.
• The very wet weather hit sales of summer clothing and footwear, as well as food, especially in comparison to last July’s heatwave-driven growth. Home and leisure were mixed, with home entertainments and ‘indoor’ products often outperforming big-ticket items which remained dependent on discounts.  

Kevin Hawkins, LRC Director, comments:
“Tourism continues to widen the gap between booming sales growth in London and the declining trend elsewhere. Other helpful factors were the widespread discounting throughout the month and the heavy rainfall, which drove more shoppers into department stores. It will be some time before the direction of the underlying trend becomes clearer.”

Helen Dickinson, Head of Retail, KPMG, comments:

“Given London was not so badly affected as other parts of the country by the poor weather in July, it is no surprise that central London, with like-for-like growth of 11.6%, outperformed the rest of the UK.  This outperformance continues the trend seen in the capital over recent months highlighting the low base of previous years caused by the detrimental effects of the terrorist atrocities of 2005.”