Survey reveals extent of London retail woes

London retailers suffered their worst January sales for five years after the snowfall and limited discounting reduced takings, but the capital still comfortably outperformed the rest of the country.

Underlying retail sales in London rose by 3.5 per cent in January, hit by the weakest footfall since 2002, revealed the British Retail Consortium-KMPG survey. The stronger pound also diminished the price advantage in London's shops for tourists from western Europe and retailers were up against a bouyant 6.5 per cent sales jump in January 2009. Stephen Robertson, the director general of the BRC, said: "After an exceptionally strong December this growth is disappointing, but not disastrous. The wintry weather put people off going shopping in the first half of January and customers are becoming cautious again about spending when they don't have to."

He added: "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."

But sales in the capital's shops were still streets ahead of those in the rest of the UK, where like-for-like sales - on stores open more than one year - actually fell by 0.7 per cent. While this can be partly explained by snowfall and access to the high street being more severely affected outside of London, the capital's retailers have comfortably outstripped those elsewhere for much of the past 12 months.

In London, food retailers benefited as consumers stocked up on basic essentials before and during the bad weather. Chains of clothing, footwear and warm accessories also felt the heat of strong sales, as consumers bought items to shelter them from the snow and ice.

However, retailers of non-essential products and discretionary homewares "struggled", said the BRC. Furthermore, store groups entered January with less stock than previous years, driven by tight stock control and stronger than expected Christmas trading, and the January clearance sales did not offer the discounting bonanza that consumers have come to expect.

The research firm Synovate said that footfall in Central London tumbled last month by 9.4 per cent, compared to January 2008. It was the worst footfall figures since the survey began in 2002.

Meanwhile, the severe weather in January also hurt Britain's eating and drinking out market. Leading pub and restaurant groups suffered a 5 per cent slump in like-for-like sales last month, as people stayed at home rather than braving the elements to venture out, revealed the Coffer Peach Business Tracker, run by Coffer Group in partnership with KPMG and UBS.