London bombings affect retail sales

Retail sales in London have slumped to their lowest levels in three years, following the July bombings.

According to the latest figures from the London Retail Consortium (LRC), retail sales in Central London were 8.9% lower in July, on a like-for-like basis, than the previous year.

The figures compare with the much smaller decline in sales of 1.9% for the UK as a whole.

The Consortium said that these were the worst figures since its data began in October 2002. The LRC said that trade in London had been hit hard by the bombings of July 7 and the attempted bombings of July 21. The West End and tourist areas suffered the most, while those further out were less affected and even benefited a little, due to people shopping locally.

The figures showed that some retailers recovered fairly quickly after the attacks, although footfall remained affected by a number of factors, including tube disruption, numerous security alerts and consumer anxiety. The LRC said that this was due to Londoners and commuters returning to shops, while daytrippers and tourists remained wary. Footfall figures showed more of a reduction at weekends than during the week.

In-store restaurants and signature sales were also affected by the decline in tourist numbers, the LRC reported. However, while big-ticket sectors continued to struggle, smaller items such as fashion accessories – especially handbags and sunglasses – and beauty products fared a little better and the combination of better weather and clearance sales also helped to boost sales of clothing and footwear.

Commenting on the figures, Kevin Hawkins, LRC Director, said: “Analysts may think that these results are not as bad as many feared. But it should be remembered that the June sales continued well into July and there was a spell of good weather in the middle of the month. Taking these factors into account, the decline in sales is very serious, compounded by the 60% increase in the congestion charge, which retailers need like a hole in the head.

“The question now, is whether some consumers will continue to stay away from Central London and whether tourists will be deterred by the threat of further disruption.”

Helen Dickinson, Head of Retail at KPMG, said: “These figures bear out much of the speculation on the impact in Central London of the terrorist event of July. Up until now London had been holding up well against the rest of the UK but consumers have shifted some of their spending to non-central and regional centres. The ongoing effect is more worrying for the capital as this may reflect a permanent change in personal shopping habits and tourist numbers are also likely to fall.”

(KMcA/SP)