LONDON SALES GROWTH WEAKEST SINCE MAY

15 October 2007

• Retail sales in Central London in September were 6.8% higher than a year earlier, on a like-for-like basis, a good gain on top of the 13.3% year-on-year increase in September 2006, when sales were recovering from the July 2005 bombings. But sales growth was the weakest since May 2007.
• Retail footfall rose above its year-earlier level according to SPSL. Cooler weather than last September’s mild temperatures drew customers into shops earlier than last year.
• Visitor numbers remained higher than a year ago. The main tourist season for Middle Easterners ended but Russian and European spending held up well. The weakness of the dollar continued to discourage American visitors.
• Clothing and footwear sales were well above last September’s, with upmarket designer fashions, handbags and jewellery remaining popular. Beauty products had another good month but homewares were more mixed, with some larger purchases slowed by consumer caution.  

Kevin Hawkins, LRC Director, comments:

“Although London continues to outperform the UK as a whole, sales growth was the weakest since May and is being driven by promotional activity. Spending confidence seems to be weakening as, despite a higher level of consumers on the high street compared with August, sales growth has slowed. Price is likely to continue to be the main stimulant of demand in the coming months as consumers’ willingness to spend weakens.”

Helen Dickinson, Head of Retail, KPMG, comments:

"The margin by which Central London like-for-like sales have outperformed the rest of the UK fell in September.  It is highly possible that the wider credit crunch issues which, for the moment at least, have left UK consumers'  spending largely unaffected, are already having an impact in the capital.  That said, 6.8% like-for-like growth is a creditable performance.  The real acid test will come in the lead up to Christmas which is predicted to arrive later this year for many retailers."