London retailers have cause to be optimistic in the run up to Christmas, despite the high street registering its worst sales figures for two years in August, according to a senior figure in retail and wholesale.
The retail sector felt the affects of civil unrest on the streets of London and other English cities last month. Mid-market retailers reported a drop of 2.2 per cent on year-on-year like-for-like sales, according to the High Street Sales Tracker compiled by accountancy firm BDO.
Stores such as JD Sports and Currys were looted by rioters and consumers were put off from parting with their money as a result, the company said.
The report cited high inflation, muted wage growth and the generally bleak outlook for the wider economy as other reasons for the low sales figures.
However, BDO national head of retail and wholesale Don Williams said businesses in the capital had cause to be positive.
“Central London is more resilient and more robust than other parts of the country. The luxury end of the market is still seeing the benefit of the tourist trade, especially from Chinese visitors.”
Many retailers are now looking forward to the Christmas sales period and Williams believes businesses in the capital can perform well, providing they have planned adequately.
He said: “I think the London consumer is likely to spend the same amount of money, maybe slightly more, than they spent last year, but they will buy slightly less stuff.
“For retailers who have planned their buys there is cause for optimism, but some will have overbought for Christmas, although not to the same extent as in 2008, when many got caught by the ferocity of the downturn.”
Across the country, the retail sector experienced growth of just 0.2 per cent in July, down from 0.8 per cent in June.
Williams said: “Ever since the recession hit, smart retailers have been working flat out to keep consumers spending in an extremely tough trading environment.
“But the scale and ferocity of the disruption we saw in August was a real body blow.
“We don’t expect the pressure on consumer confidence to ease – or the cash they have in their pockets to increase – so we’re not expecting the sort of ‘keep calm and carry on’ sales uplift that we might see if the economy was in better health.”
Retailers who were not directly hit by the riots felt the pinch when they were advised to close early by police and trading hours were reduced as a result, BDO said.