Retailers in London enjoy pre-Christmas sales surge

Retail sales in the capital soared 13 per cent last month compared with 2008

London's retailers posted their best sales for more than three years in November, raising hopes of a bumper Christmas for shops in the capital.

John Lewis, the department-store chain, added to the optimism by delivering the best weekly sales in its 145-year history. However, the British Retail Consortium (BRC) dampened premature festive celebrations by noting that retailers in the capital were up against dire sales last year when the financial turmoil hit consumer confidence. Like-for-like sales in the rest of the UK also rose by a more modest 1.8 per cent last month.

In November, underlying retail sales in central London soared by 13.3 per cent, boosted by the unseasonably mild weather, widespread discounting and the influx of overseas visitors from Western Europe, said the BRC-KPMG survey. The uplift was the capital's strongest since October 2006 and compares with sales falling at an annual rate of 0.4 per cent in November last year during the maelstrom of the financial crisis. Stephen Robertson, the director general of the BRC, said: "These figures show London retailers have had a very encouraging start to Christmas with even big-ticket items doing well."

The BRC said that food sales were robust and in-store restaurants benefited from the soggy November weather. Retailers also helped themselves by launching special sales events and discounts, which lifted sales of homewares, furniture, clothing, footwear and accessories, as well as beauty and gift products. Last month, footfall in central London was the best since June, 3.6 per cent higher than in November 2008, according to Synovate Retail Performance.

Helen Dickinson, the head of retail at KPMG, said: "The weakness of the pound has certainly continued to attract overseas visitors who were out in the capital's department stores in force."

Over the three months to the end of November, central London's retailers averaged 8.2 per cent growth in underlying sales, compared with 4.1 per cent across the rest of the UK. One factor helping to boost overall UK retail sales is less discounting than this time last year. As of last Friday, 60 per cent of UK retailers were advertising discounts or promotions, such as three-for-two offers, which compared with 80 per cent of retailers in the same week last year, according to the accountancy firm PricewaterhouseCoopers.

Mark Hudson, of PwC, said: "Discounting outside of the grocers on the high street is less deep and widespread than it was in 2008. There was near-blanket discounting in clothing and footwear last year, but it is currently much less aggressive and more specific, due to better managed stock levels and improved consumer confidence."

In a further sign of festive optimism, John Lewis, the high-street bellwether, saw record sales of £110m last week, continuing its recent streak of buoyant weekly sales. The department store cited strong sales of fashion, brands, watches, sewing machines and gaming, as well as "stellar sales" of toys helped by the exit of Woolworths.

Andrew Murphy, the director of operational development at John Lewis, said: "In toys, we have been absolutely cleaning up and making a killing in the last six weeks." He added there was significantly more demand for traditional toys, such as train sets and wooden building blocks.

He said it appeared that consumers had been over-cautious with cutting back on spending earlier in the year. "There is no sense of it being a budget Christmas for people, although there is no doubt that people are doing their price-matching homework."

Despite signs that Christmas 2009 will be better than last year, retail chief executives remain cautious, if not a bit downbeat, about next year. But Mr Murphy said: "Our money is on a reasonable but not over-spectacular 2010."