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Shopkeepers in London suffered their worst January for five years as the bad weather and economic slump kept shoppers away from high streets.
The British Retail Consortium said sales in the capital were just 3.5 per cent higher in January this year than last year — the worst reading since 2005.
January footfall — the number of shoppers in the high street — fell to its lowest level since records began in 2002, although those who did venture out spent more than in previous years.
Snow and ice put many off and the stronger pound and weaker euro pushed prices up for European visitors.
The BRC's director-general, Stephen Robertson, 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.
“But London retail sales are still showing real terms growth and significantly outperforming the rest of the UK. 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.”
London fared better than the rest of the UK where sales fell 0.7 per cent in January in the worst performance for 15 years.
Although much of the nationwide slump was put down to the snow, it stoked fears that the UK could plunge back into recession having staged only a tentative return to growth of 0.1 per cent in the final quarter of 2009. Rising taxes, wage freezes, high unemployment and pressure to cut household debts are all likely to damp spending early this year.
Helen Dickinson, head of retail at KPMG, said: “London, like the rest of the UK, suffered the effects of the dismal weather conditions as people stayed at home rather than trekking into the capital.
“As the month progressed, sales picked up considerably but it was not enough to take the month's performance anywhere near that of December. The results were flattered by the impact of higher shop prices, given the higher VAT rate this January compared with last January.”
Sales were up 6.1 per cent in Bond Street, Oxford Street and Regent Street despite fewer shoppers visiting the West End in January. Food sales increased sharply as households stocked up on essential items.
