Retail sales growth in London hit a five-year low in January after being impacted by the snowy weather and a reduction in discounting compared to a year ago.
Retail sales in central London rose 3.5% in January, against a 6.5% increase in the same month last year, according to the British Retail Consortium London Retal Sales Monitor. This marks the worst January sales growth since 2005.
Snowy weather and less discounting than a year ago meant that people made fewer shopping trips although those that did go shopping spent more.
The strengthening of the pound in January, especially against the euro, lessened London’s price advantage for visitors from Western Europe. The fall of the Chinese New Year in February this year, compared with January last year, may have also delayed sales.
Clothing, footwear and warm accessories were driven by the weather.
BRC director general Stephen Robertson said: “Customers are becoming cautious again about spending when they don’t have to, but London retail sales are still showing real terms growth and significantly outperforming the rest of the UK. The capital’s retailers will be hoping these results are mainly due to bad weather, rather than any long-term return to concerns about personal finances, keeping consumers away from shops.”
Consumer confidence improved in January 2010 and was much better than year ago, according to Gfk NOP.
Head of retail at KPMG Helen Dickinson said that the results were flattered by the impact of higher shop prices, given the higher VAT rate in January 2010 compared to January 2009. She added: “There is no doubt that the strong sales we saw in December 2009 are not indicative of the trend for the rest of the year. London is likely to continue to outperform the rest of the country.”