Retailers in the West End of London are expecting a 1.6% rise in takings to £2.34bn in the six weeks to Christmas, as a surge in foreign shoppers helps offset lower spending by Brits.
US, Chinese and Middle Eastern visitors are being drawn to the capital by the double-digit decline in the value of the pound against foreign currencies since the EU referendum in June.
The average monthly spend for each international shopper soared by more than 25% to £1,155 between July and September, according to the New West End Company, the trade body that represents retailers on Oxford Street, Regent Street and Bond Street.
Jace Tyrrell, chief executive of the New West End Company, said: “We expect this positive spell to continue as we enter the Christmas trading period, with foreign spend set to be a key driver. Domestic consumer confidence, which was tentative at the start of the year and shaken further by the referendum outcome, is also starting to steady as we gear up for Christmas.”
He said Oxford Street’s first traffic-free shopping day in four years on Sunday, when singer Craig David will flick on the Christmas lights, would also help lift sales.
But Tyrrell predicts the proportion of shoppers visiting London’s main high streets will drop by 3.1%, after a 2.7% fall last year, as more people choose to buy online.
Continued uncertainty about Brexit is also likely to affect consumer and business confidence over the next the two years, according to Tyrrell.
West End retailers will need to find an additional £124m in tax next year as the business rate revaluation, the apprenticeship levy and the “national living wage” come into force. These changes are expected to hit West End profits by up to 25%.
“Retailers will need to generate significantly increased sales to keep up with the hikes,” Tyrrell said.
