Sales up in UK high streets but elsewhere spending drops

London: At one end of Oxford Street on Saturday, a grey-suited salesman, wearing a wrap-around microphone headset, had attracted a small crowd outside a shop named Parfum Couture. Selling bags of perfume for £20 (Dh119.40) each, he told onlookers: "If you love your wife, take one. If you love someone else's wife, take two, and if you're Tiger Woods you should bring 10." He did a roaring trade.

He was not the only one.

Towards the Marble Arch end of the street, the department store chain John Lewis was preparing to close its doors on its busiest week ever. In the seven days to Saturday the chain racked up sales of £110 million beating the record set in 2007 by about 8 per cent.

So far in December sales in the three key shopping streets in London Oxford Street, New Bond Street and Regent Street are up 10 per cent on 2008, according to the New West End Company (NWEC), which represents retailers there. Sales are also ahead of December 2007, which was an all time record.

But the story is not the same everywhere.

In November, like-for-like sales in central London were up 13.3 per cent, according to data published tomorrow by the London Retail Consortium. But figures from the British Retail Consortium showed sales in the entire country only ahead by 1.8 per cent, compared with 2008, when sales were particularly poor as consumer confidence had been rocked by the near-meltdown of the banks.

Increased shoppers

London is benefiting from three significant advantages: the weakness of the pound, which is attracting visitors from mainland Europe; the fact that the recession has hit the capital least hard so far; and the increased flow of shoppers from the regions whose high streets have been decimated by the bankruptcy of such chains as Woolworths, Threshers, Zavvi and Adams. The last month of VAT at 15 per cent has also provided a boost.

Stephen Robertson, director-general of the British Retail Consortium, said London's sales increase was "great". "Retailers will be hoping customers remain as resilient into the new year."

Over the last three months, shops in London have reported sales up 8.2 per cent on a year ago, double the 4.1 per cent recorded nationally, and evidence so far suggests the momentum on the streets of London has continued into this month.

The fastest growing of the John Lewis group's 27 stores, said a spokesman, were the Peter Jones outlet in Chelsea and the chain's flagship Oxford Street shop. Bluewater, in Kent, has also performed well. The online JohnLewis.com business also recorded another record week.

The huge Primark outlet on Oxford Street has also reported record takings in recent days. The store is understood to have raked in some £750,000 last Saturday 17 per cent up on its takings on the same day in 2008. It usually takes about £200,000 a day. On Saturday, all its 18 tills were manned and turning over good business.

Overseas visitors

Andrew Murphy, the director of customer service at John Lewis, said overseas visitors were boosting business, but he added that the London stores were also useful indicators of the state of the wider economy: they had been hit first and hardest by the beginning of the downturn, and now seemed to be emerging from the recession first, too.

"Customers are busy buying gifts for all the family as fashion brands, watches, sewing machines, gaming and toys all enjoyed stellar sales," said Murphy. "Bigger household purchases are also seeing incredible growth".

Consumer spending has held up better than many economists had predicted as consumers in secure jobs have found themselves far better off as a result of lower mortgage repayments, lower energy costs and much lower food price inflation.

Less stock

Retailers are also better prepared. They have less stock to unload than last year and discounts which hit 70 per cent in the weeks before Christmas last year are lower and fewer.

Even if sales are rising, the mood among shoppers is cautious.

At the Westfield Centre in west London, Kirsttie Fill, 32, a nightclub security manager, said: "I'm only buying presents for my parents this year, as I have a mountain of bills to pay and I just can't afford to include all my friends and their children like usual. My income started falling after people stopped going out clubbing during the week and I'm worried things will take another turn for the worse."

Fay Williams, 25, had taken a seasonal job, to help make ends meet. "Money is tight since I lost my temp position, so I have taken a job as an elf to pay for my Christmas presents this year. I'm trying to buy people less expensive gifts, because I don't want to leave anyone out, but I don't want to look cheap and despite the long hours, being Santa's little helper doesn't pay very much." There are fewer problems for tourists. Helen Dickinson, head of retail at KPMG, said the exchange rate had "certainly continued to attract overseas visitors who were out in the capital's department stores in force [in November]".

NWEC's marketing director Jace Tyrell said fashion had been selling particularly well over the weekend, and luxury goods, which are being snapped up by overseas shoppers, and big ticket items.

Barely two weeks before Christmas, retailers say there is plenty to play for. After that chains will be concentrating on winter sales, many of which get under way online as soon as stores close on Christmas Eve.