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Strike action threat to Christmas Sales

Mixed fortunes for retailers as tube strikes cast shadow over festive trading, royal wedding promises spending bonanza and Irish retailers fear for future.

Tube strikes in the run-up to Christmas and on Boxing Day are threatening to overshadow what is otherwise forecast to be a bumper festive period and cost London retailers between 20% and 30% of their first bite at the post-Christmas Sales period.

Potential strikes by London Underground workers over pay and conditions on the crucial first Sale trading day of Boxing Day, when £120m rings through the tills in the West End alone, could impact London retailers’ sales on the day by between 20% and 30%.

The New West End Company (NWEC), the body that represents retailers in the area around London’s Oxford Street, Regent Street and Bond Street, has met with London mayor Boris Johnson and Transport for London to discuss the impact of the potential strikes, the first of which could hit London on Sunday evening.

Jace Tyrrell, NWEC director of communications, said 96% of visitors to the West End use public transport, the majority of which use the Underground, to get to the capital’s shopping mecca.

He said: “Any disruption is hugely damaging for trade. It is vital that we are open.”

NWEC, which estimates that £1bn will be taken over the six weeks to the end of the year by retailers in the West End, said it was forecasting a 10% rise in sales in the area for November and December, without taking into account any disruption caused.

London has been plagued by a series of tube strikes in recent months. Voting on further strikes ends on December 7 with the threat of industrial action lingering in the vital run-up to Christmas and beyond.

Noel Saunders, managing director of John Lewis’s Oxford Street store, said tube strikes could impact sales at the store by 20%.

While John Lewis does not open on Boxing Day, key London department stores such as Selfridges on Oxford Street and Harrods and Harvey Nichols in Knightsbridge could be affected.

Harvey Nichols chief executive Joseph Wan said: “A strike in the past doesn’t seem to have had a real impact on us. However, tube strikes or station closures will have a bigger effect during the Sale period. Our regular customer may not come but the more aspiring customer looking for a bargain will. It will affect us.”

Separately, retailers told Drapers they expected a strong start to pre-Christmas sales to continue, but warned of a difficult 2011.

Selfridges chief executive Paul Kelly said: “Pre-Christmas trading is very strong. I believe we are going to have a strong Christmas. One hopes to improve on the previous year.”

Michael Ward, managing director of Harrods, said: “Christmas has started very well and we believe that will continue. People are buying higher-priced items and classic pieces such as cashmere and fur.”

He added that overseas customers had been strong drivers of sales.

“The momentum has not stopped for the whole quarter to date,” he said.

John Lewis managing director Andy Street predicted sales at the department store over the Christmas period would be ahead on last year by between 4% and 5%.

He said: “We are encouraged by our Christmas trading performance to date. This week is shaping up to be another good week for us, with strength across all our categories.”

Neil Clifford, chief executive of premium footwear chain Kurt Geiger, said he expected trade to be “strong” after like-for likes jumped 30% in the week to November 15 as the party season got underway.

Richard Kirk, chief executive of value chain Peacocks, said: “At the moment [trade in the run-up to Christmas] is OK. It all seems very late this year though. Suddenly people will realise that VAT will go up and the last four weeks will be busy.

“My main concern is after Christmas. Sales will be good for two or three weeks after Christmas but then there will be a period of nervousness.”

Independent retailers were bullish. Mark Bage, owner of York premium indie Sarah Coggles, said: “Last year, everyone thought Christmas was going to be horrific and it was slow to start but it started later and turned out to be good. I think we will see the same pattern this year.

“I would expect sales to start picking up at the back end of this week because people are getting their last paycheck before Christmas and realising it is December next week.”

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