The strong performance of Britain's retail sector during the Christmas period will be underlined today by new figures showing that shops in central London had their best December for at least seven years.
The British Retail Consortium (BRC) will say that sales in the centre of the capital were 12 per cent stronger last month than in December 2008, and better than in any Christmas period since the organisation began conducting the research in 2002.
December's figure for London compares to a national average increase in retail sales of 4.2 per cent last month, according to the BRC. Over the three months to the end of last year, London sales were up 10 per cent, compared to 3.3 per cent across the UK as a whole.
"This is a dazzling performance, London's best December sales growth since this survey began in 2002, and all the more impressive following a strong November," said Stephen Robertson, director-general of the BRC. "The result is boosted because the comparison is with terrible figures a year ago, when financial turmoil hit London consumers especially hard, but this is outstanding growth by any interpretation."
The BRC's figures suggest that retailers benefitted from three positive trends during December: improving consumer confidence, higher spending and the falling value of sterling. While the cold weather appears to have hit footfall in shops, with shopper numbers actually declining compared to previous months, consumers appear to have felt sufficiently confident about their finances to increase spending on food, clothing, footware, beauty products, homewares and big-ticket items such as electrical goods and furniture.
The low value of sterling was an additional bonus for retailers, with visitors numbers to the capital markedly up. Shops appear to have been buoyed by spending from tourists from China, the Middle East and Europe.
Mr Robertson said the retail sector had been delighted with its strong performance last month but warned that many shops were concerned about the year ahead.
"Generally, customers were a lot more positive than the year before, so more willing and able to spend," he said. "But, given the prospects for jobs, wages and taxes in 2010, don't assume customers will go on spending like this."
"These are great figures and Christmas really provided an opportunity for department stores to outperform, leading to a pronounced polarisation between retailers who got the proposition right and those that did not," said Helen Dickinson, head of retail at KPMG.
"December's results also showed the growing importance of post-Christmas trading, and the ongoing weakness of the pound has certainly continued to attract overseas visitors."
London's strong performance will also have been a major contributor to the impressive national sales figures posted by several large store chains, with Next, John Lewis and Marks & Spencer (MAKSY) all performing well.