An update on my earlier piece about retail sales in London in the wake of the July terrorist bombings. Yesterday the British Retail Consortium (BRC) reported a 9% year-on-year fall in London retail sales:
Retail sales in Central London during July were 8.9% lower, on a like-for-like basis, than in July 2004. This compares with a 3.6% increase in June 2005. July's fall was the worst ever since the data began in October 2002 and comes after several difficult months for Central London retailers.
However excluding London, like-for-like sales were flat in July, indicating that the rest of Britain was not significantly affected. While it is reassuring that the slump in London retail spending did not affect national figures more strongly Kevin Hawkins, director-general of the BRC, warned it was too early for London-based retailers to draw comfort.Yesterday's Financial Times reported him as saying:
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 per cent increase in the congestion charge which retailers need like a hole in the head.
The potential impact of last month's big jump in the London congestion charge has received little press attention so far. But Mayor Ken Livingstone must be nervous. According to the BBC, he has just launched a bid to 'revitalise London' :
More than 100 events, festivals and special days out will be staged across London as part of a multi-million pound campaign to boost economic recovery. ...The Mayor of London's project aims to coax visitors back after the bombings.
Meanwhile the Bank of England regional agent's Summary of Business Conditions for August reported that:
Contacts in and around London reported a sharp slowing in consumer spending on both goods and services following the terrorist attacks on 7 July. But demand returned to more normal levels in the weeks following the bombings.
Official UK retail sales figures for July are due on Thursday morning.