Congestion charge cuts sales, says John Lewis

The biggest chain of department stores in Britain is calling for an overhaul of the London congestion charge, claiming it penalises shoppers more than commuters.

John Lewis said that sales at its flagship Oxford Street store had fallen by 7.3 per cent since the scheme was introduced just over six months ago compared with an increase of 1.7 per cent at its 25 stores outside the zone.

The chain, which includes 140 Waitrose food stores, said yesterday that the benefits of reduced congestion and pollution would eventually be outweighed by negative effects on city centres as more shoppers visited out-of-town sites.

John Lewis is funding a six-month research project by Professor Michael Bell, a world expert on congestion charging from Imperial College London. He will consider refinements to the scheme, which was introduced in mid- February by Ken Livingstone, the London Mayor.

One proposal is to replace the current £5 flat rate with a charge based on the amount of time a car spends inside the charging zone, a system that would see commuters pay more than shoppers.

Sir Stuart Hampson, chairman of the John Lewis Partnership, said: "It is our view that the present charging scheme is flawed. It is a blunt instrument, and it has had unintended consequences. It is all very well the buses running on time but, if there is nothing to go into the city for, the buses will be empty."

As the architect of the scheme, Mr Livingstone acknowledges that there is need for more flexibility in charging but the technology required was not available when the charge was introduced.

The Department of Transport is considering charging by the minute using a transmitter inside the car, a system that was pioneered in Singapore's congestion charging scheme. This would be incorporated in a national charging scheme being considered by the Government but which will not be introduced for at least 10 years.

Some analysts said that sales at John Lewis's flagship store would have suffered more than others because of the effects of the war in Iraq, the heatwave and problems with the London Underground's Central line. But the store said that its other stores in Kingston upon Thames and Brent Cross had recorded strong sales in the same period. It said the number of cars using the Cavendish Square car park near the flagship store had fallen by 70 per cent in six months, mainly because shoppers were deterred by the charge.

According to a survey by the London Chamber of Commerce in June, 80 per cent of retailers said customer numbers were down and 76 per cent said turnover had fallen. Colin Stanbridge, chief executive of the London Chamber of Commerce, said: "We have been saying for some time that the congestion charge is hurting and harming retailers. The Mayor has asked us for hard evidence. This announcement by John Lewis is the most concrete proof so far that even the most famous names are susceptible to the downturn in trade to which the congestion charge has contributed."

Mr Hampson said the current congestion charging scheme would have even more serious consequences for shops in cities such as Edinburgh, Bristol and Sheffield, because they were not as well served by public transport as the capital.

The impact of the first six months of the congestion charge will be disclosed in a report by Transport for London to be published next month.