London’s West End beats pre-Covid level but little room for Christmas cheer

Footfall in the capital's shopping centre rose 13% on Saturday after switching on of festive lights

London’s West End was busier than before the pandemic for the first time at the weekend when crowds poured into the capital to view the Christmas lights, which were switched on before the traditionally busy festive season.

Footfall around the shopping destinations of Oxford Street, Regent Street and Bond Street was 13 per cent higher on Saturday than on the same day in 2019, according to business group New West End Company (NWEC), a day after the festive decorations were illuminated.

However, in the run-up to the lights ceremony, footfall was 25 per cent down on two years ago, although this was a more robust figure than the rest of 2021, which is 58 per cent down overall, as soaring inflation, a preference for online shopping, the work-from-home trend and rising consumer prices also pose a threat.

“Saturday’s figures marked a major milestone — the first time since the start of the pandemic that we have surpassed 2019’s footfall levels,” said Jace Tyrell, chief executive of NWEC, which represents 600 businesses in Oxford Street, Bond Street, Regent Street and Mayfair.

Mr Tyrell said it was “vital” the momentum continues to ensure the West End receives the spending support it needs, as he urged the capital’s residents to head into the area to give Christmas shopping a further boost.

The London uplift comes as Britons prepare to spend an average of £428 ($574) on Christmas presents and celebrations this year, up from £384 last year when England was in lockdown, leading to a £21 billion festive spend in total, according to PwC.

One in four consumers intend to spend more this festive season, leading to a 12 per cent increase on the amount spent last year.

With just six weeks to go until Christmas, the more positive figures from the weekend in London were a boost to the West End, which was fearing a retail washout amid a slower than hoped for recovery in high-spending visitors from the Middle East, US and South-east Asia.

Earlier this month, new data revealed the threat to the capital's retail and entertainment sector from the working from home trend and the lack of tourists.

Overall festive spending was estimated to be less than half of pre-pandemic levels despite a steady increase in footfall since September — with the hit expected to cost the West End economy more than £1.2bn.

Remote working will keep thousands of commuters out of the West End and City in the run-up to Christmas, according to a recent study from the London Chamber of Commerce and Industry, which expects the trend to continue for the foreseeable future.

Forty-four per cent of businesses expect that more than half their staff will still be regularly working remotely in 12 months’ time, according to the annual London Business 1000 study, which rises to 59 per cent for large employers.

Christmas 2021 will be the first spending season since the lockdown of last year and the first peak season since Chancellor Rishi Sunak axed the 20 per cent tax-free perk for foreign tourists visiting London, a move that rival capital city Paris has been quick to exploit with a massive marketing blitz.

Mr Tyrrell warned that cities such as Paris and Milan were threatening to “eat our proverbial Christmas lunch”, thanks to the competitive advantage they now have.

Meanwhile, data from flight bookings analysts ForwardKeys shows December bookings to the UK standing at just 51 per cent of the level seen in 2019, while planned flights between the UK and US in November are also only half the levels of two years ago.

While PwC is expecting an increased spend over Christmas, much of this will take place online as consumers look for deals and to ensure stock is available amid the supply chain crisis.

“Following an unsurprising but significant shift towards online shopping in the past year, online will be the big winner again this Christmas.” PwC said, with London” the most likely region to buy online” due to the convenience of click and collect services.

More than two thirds of Christmas spending will be online, edging closer to 83 per cent over the Black Friday period, when shoppers hunt for huge bargains on the web.

Black Friday sales are projected to grow 21.7 per cent this year, according to Finbold, increasing to £3.39bn from £2.78bn in 2020, with Britons spending £3.38m per minute over the shopping weekend with £1.82m of spent offline and £1.55m online.

Elsewhere, this year, the Brits are expected to spend a total of £3.38 million per minute during the Black Friday shopping weekend. They are projected to spend £1.82 million per minute on offline shopping while £1.55 million goes to online platforms.

PwC said more than half of consumers will have bought most of their presents by the end of November amid concerns over stock levels, delivery times and further impacts of Covid-19.

While more than 300,000 workers are set to receive a pay rise from today, after higher rates were announced for the Real Living Wage, a voluntary rate paid by thousands of employers, this may not translate into higher spending as the country faces soaring inflation.

Almost 60 per cent of British companies are planning to raise their prices to recover rising supply-chain costs and wages, according to a thrice-yearly outlook from Accenture and IHS Markit.

The “further sharp rise in consumer prices” comes as inflation spreads more generally across the economy.

Inflation is already above the Bank of England’s 2 per cent target and on track to reach 5 per cent next year after an anticipated jump in regulated energy prices in April, piling pressure on policymakers to raise interest rates.

The report’s findings suggested that staff will demand bigger pay rises to compensate for rising costs after the poll of 12,000 businesses globally, including 1,400 in the UK, found staff and non-staff costs rising to unprecedented levels.

Updated: November 15th 2021, 4:29 PM
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