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London shops lose millions
11/07/2005 16:28 - (SA)
London - Retailers estimated on Monday that last week's terrorist attacks in the capital have already cost £26m in lost sales, providing a further setback for the already struggling retail sector.
The British Retail Consortium, the industry's leading trade association, said there was a 77% drop in the number of shoppers in central London on Thursday, the day that terrorists set off bombs on three subway trains and a bus, killing at least 49 people and injuring hundreds more.
The attacks halted the transportation system around the capital and several retailers closed early to allow workers to make the long journey home. Many other workers stayed in their offices throughout the day and there were noticeably fewer tourists on the streets.
The BRC, which is encouraging its members to continue trading as usual, said it is watching tourist activity closely as the key to future trading.
The BRC said: "If tourists stay away from London then we could expect the impact of the attacks to be more long term."
Economists have pinpointed consumer confidence and tourist numbers - and their effects on spending - as one of the major downside risks to the economy to come out of last week's attacks.
The crisis committee of the World Travel & Tourism Council said after an emergency meeting on Friday that tourists numbers may decline by approximately 588 000 from the previously forecast 30.95 million for 2005 because of the bombings, a drop of 1.9%.
Despite that, the BRC said that it expects things to return to normal during this week, pointing to the experience of New York retailers following the September 11 attacks.
"After September 11, shopper numbers returned to previous levels within two weeks, so we would hope and expect a similar scenario to occur again," the BRC said.
Stuart Rose, Chief Executive at major department store Marks & Spencer PLC said the impact of the attacks could span a few weeks, but added "Londoners are very resilient people and it is back up and running already".
Analysts expect that some of the sales lost by retailers in the centre of London will be soaked up by suburban stores and out-of-town retail parks.
However, the sector has already been under pressure with several major retailers reporting poor or slumping sales since Christmas.
The London Retail Consortium reported on Monday that sales for June were up 3.6% on a like-for-like basis, compared to June 2004, but analysts pointed out that the result benefited from the comparison to a year ago when sales declined on the back of poor weather and subway strikes.
"Any hope that the month's growth will be indicative of ongoing strong performance are likely to have been dashed following the introduction of an increased congestion charge (for motorists entering London) in July and the tragic events of last week which will no doubt impact negatively on shopper and tourist numbers," said Helen Dickinson, head of retail at KPMG.
- AP
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