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17 May 2010
· Retail sales in central London in April were 3.6% higher on a like-for-like basis than a year ago, when sales had risen 5.1%, boosted then by Easter falling in April 2009 but March 2008. The April trading period included only Easter Sunday and Monday this year, but all of Easter in 2009.
· Retail footfall in April fell below its year-earlier level, hit by Easter timing and the volcanic ash cloud which prevented tourists from getting to the capital.
Sterling’s weakness continued to attract overseas visitors, especially from western Europe, China and the Middle East. Chinese visitors in particular were much more numerous than a year ago.
The earlier Easter slowed food sales as most of the Easter buying fell in March this year. Non-food was similarly affected. Pre-election uncertainty and consumer caution dampened discretionary purchases.
Stephen Robertson, Director General, British Retail Consortium, said:
“This is nowhere near as bad as it looks. This looks like a dramatic slowdown in growth compared with March but it was mainly down to Easter and ash.
“This year’s earlier Easter meant much of the spending resulting from it fell into March, undermining April’s figures. The lengthy flight ban did disproportionate damage to London retail because the capital relies more on shopping by overseas visitors. People trapped here were often running short of money and spent less than a fresh influx would have done.
“Consumer confidence is uncertain. Customers are worried about jobs, the economy and prospects for their own finances but fundamentally they are happier to spend than a year ago. Ash and Easter are temporary effects. May’s growth is likely to bounce back but emerging news about Government tax plans will influence how much.”
Helen Dickinson, Head of Retail, KPMG, said:
“The timing of Easter, falling into March this year but in April last year, has deflated this month's figures and makes year-on-year comparisons difficult. However, even taking this into account, London still outperforms the rest of the UK and the capital’s shoppers continue to be more resilient to political and economic uncertainties. However, disruption to air travel caused by the Icelandic volcano affected the number of visitors to London, which is a key driver of outperformance.”
The May 2010 London RSM, covering the four weeks 2 – 29 May 2010, will be published on 8th June 2010. The data is collected and collated for the BRC by KPMG.
The London Retail Sales Monitor (LRSM) measures changes in the actual value of retail sales excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values. Retailers report the value of their sales for the current period and the equivalent period a year ago.
'Like-for-like' sales growth is the percentage change in the value of comparable store sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Therefore like-for-like sales growth will usually be lower than total sales growth.
The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
In its role as administrator of the London Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a monthly basis. This data consists of the relevant current month’s sales data and comparative sales figures for the same period in the prior year. The accuracy of the data is entirely the responsibility of the retailers providing it. The administrator role has been performed by KPMG since 2 November 2003. The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at their own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its administration of the LRSM and its aggregation work to any party other than the LRC and its parent company the BRC.
Central London includes the following areas: Oxford Street, New Oxford Street, Tottenham Court Road, Soho, Covent Garden, Knightsbridge, Kensington High Street and parts of Chelsea.