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London retail sales at four-year low

Retail sales in London in August were at their lowest level for four years, according to the London Retail Sales Monitor.

Sales for the four weeks to August 29 were down 5.9% on last year, the first time they have fallen this year, following a strong seven months. It is also the biggest like-for-like drop since August 2005.

Overall UK retail sales dropped 0.1%, marking the first time this year that London has performed worse than the UK as a whole.

The figures, released by the British Retail Consortium and auditor KPMG, showed that clothing and footwear performed worse than food.

The fall in London was due in part to better August weather prompting people to spend their time outdoors, as well as visitors from the Middle East returning home earlier this year, as Ramadan began earlier.

Stephen Robertson, director general, British Retail Consortium, said: “These results don’t suggest the recovery is under way. This is the lowest London sales growth since August 2005. This looks like a dramatic drop, but it’s compared with a strong August 2008 – the third highest figure last year. The rest of the UK saw poorer growth last August and so a better result this year.

He added: “Clothing and footwear and big-ticket household goods suffered the biggest sales falls. People who bought summer fashions during June’s heatwave and warmer clothes in July’s downpours didn’t buy more and customers are still reluctant to make major commitments.”

Helen Dickinson, head of retail, KPMG, said: “The timing of the bank holiday, which fell into August’s results for 2008 but not in 2009, did not help the overall figures. The results for the month and the rest of the year need to be considered in the light of the performance last year, which continued to weaken as the year progressed. Negative like-for-like sales on the back of negative like-for-like sales in the same month in the previous year will present many retailers with some serious challenges around controlling costs and generating cash.”

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