UK: Retail Sales In London Fall Sharply

Latest figures from the British Retail Consortium (BRC) show that retail sales in central London in October were 1.8% lower than a year earlier, on a like-for-like basis, the worst since summer 2005 but still slightly stronger than the 2.2% decline in the UK as whole. Retail footfall in October was weaker than in the past few months but still just higher than a year ago, in contrast to the year-on-year decline in the UK as a whole.

The BRC said the banking crisis and slump in the housing market depressed consumer confidence. Despite further discounting, homewares were especially hard hit and clothing and footwear were difficult. Food sales held up, though largely reflecting the effect of high food prices.

Stephen Robertson, Director General of the British Retail Consortium said, "London's long-standing sales superiority over the rest of the UK is being rapidly swept away. The financial crisis has now rocked consumer confidence in parts of the workforce that it had previously not reached. Even London's high earners are worried about job security and the ailing housing market, so are reining in their spending.

"Hard-pressed households and retailers in London will hope the Bank of England's recent bold rate cuts will boost confidence in the run-up to Christmas."

Helen Dickinson, Head of Retail at KPMG added, "The trend for a fall in sales in the capital, which was seen for the first time in nearly three years in September, has continued for the second month in a row with a drop of 1.8% in like-for-like sales. This shows that the gap is closing between London and the rest of the UK, where like-for-like sales fell 2.2% in October."