London's West End Christmas sales to rise as tourists continue to spend - report

Retailers in London’s West End are predicted to take over £50 million a day in the six weeks to Christmas but till receipts should rise only 1.5% overall. That is because uncertain economic prospects are affecting domestic shoppers while tough comparisons with London’s tourist spending surge last year mean 2017’s growth will be less of a headline-grabber.


London's luxury stores will benefit from higher tourist numbers


The New West End Company (NWEC) said Wednesday in its annual Christmas Tracker that till receipts should hit £2.61 billion this Christmas season with average takings of £51.1 million daily.

TOURISTS ARE KEY

Stores are taking on 4,700 new season employees to meet visitor demand. But while that demand will be high, with central London remaining a tourist magnet, when it comes to international shoppers, the sharpest rise was seen last year after the Brexit vote sent the pound plunging. That means this year’s rise in international shoppers looks less spectacular at 4%.

Yet while that set of figures isn’t massively higher than Christmas 2016, it’s still pretty impressive given the shaky economic backdrop as the weak pound continues to underpin the London luxury retail market. 

While any sudden strengthening in the pound’s value could mean a reversal for London’s luxury stores, for now that doesn’t look likely to happen so the rest of the year should see a similar international boost to that seen in the first 10 months. According to tax-free shopping company Global Blue, average spend per person is already up 4% this year and each Chinese tourist is spending an average of 11% more at £1,583.


Retailers are pulling out all the stops to make the Christmas experience special in-store


How important are tourists to the city’s stores? Of the 200 million visits to London every year, 25% are international tourists, spending £3.5 billion annually. Sales to non-EU tourists have already gone up 28% between July and August this year, with sales to Chinese tourists driving this growth, increasing by 59% over the same period.

It’s been a more difficult year for UK shoppers however  with consumer confidence shaky and footfall expected to slide by 3.2% as shoppers become more targeted in their visits and continue to migrate online. But lower footfall does not always mean lower sales – retailers continue to invest in more personalised and exclusive products in an effort to tempt shoppers through their doors and central London flagships are benefitting from this investment more than some regional stores.

RETAILER VIEWPOINT

But some retailers are shy of making big predictions for Christmas sales just yet. Karen Lord, head of branch at John Lewis’s Oxford Street store, said: “This Christmas is difficult to predict as we have seen some caution amongst domestic shoppers in the first half of the year, mainly around big-ticket items such as carpets or fitted kitchens. That could continue over the next few weeks but in addition we also expect to see the ‘Lipstick effect’ take hold where people treat themselves and pull out all the stops for Christmas. We have seen some strong sales over the last month or so.”

Susan Reid, Regional Retail Director, of Debenhams said gifting and health and beauty should be particular areas of growth: “Last year we were very strong in [these] areas and we have planned even more in these categories this year.” She cited on-demand beauty services firm Blow as “a major new in-store experience for our customers this Christmas [that] is about connecting emotionally with our customers and making shopping more sociable and fun.”


Stores are preparing their windows for party season shoppers


However, she added: “It is still a challenging and uncertain retail environment but people want to deliver for their friends and families. Shoppers remain cautious in large places given the recent terror attacks and footfall does dip in the aftermath of an event. But if nothing untoward happens, shoppers will love the festive spirit of the West End and be out in force.”

Away from the tills, NWEC said that early weather forecasts of above-average temperatures in the two weeks before 25 December will combine with a range of attractions such as the Christmas Lights across Bond, Oxford and Regent Streets, increasing the likelihood of an influx of visitors to the area.

NEW STORES

Christmas shoppers will also find a number of new flagship stores since last year as a total of 65 new West End stores opened in the first seven months of 2017, up from 52 for the whole of the previous year. Lululemon, Reserved, Arket and Weekday have all opened new locations in the West End with many of the new locations being UK firsts.

Jace Tyrrell, Chief Executive at NWEC, said: “The West End is a huge contributor to the country’s economy, generating over £9 billion in sales last year, and we’re glad to see a strong end to the year forecast in this report. There are serious challenges ahead for the West End however and we need support from all political parties and levels of government to ensure the area will continue to thrive into the future.”

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