Trading on the high street slows as shoppers stay glued to their televisions

British Economy
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The Independent Online

Shops in the UK have seen sales severely dented since the atrocities last week as consumers remain glued to their television sets.

Shops in the UK have seen sales severely dented since the atrocities last week as consumers remain glued to their television sets.

Although trading started to recover by the weekend, some retailers have already suffered a 30 per cent fall in revenue. The Association of British Travel Agents says traffic on the most popular worldwide booking system is down by 28 per cent as holidaymakers delay travel plans.

In the housing market there is anecdotal evidence, especially in London, of property chains collapsing as buyers get cold feet. One London estate agent, who declined to be named, said 20 transactions fell through on one day last week.

Economists say "big ticket" items such as houses, cars, holidays and furniture are most vulnerable during times of uncertainty, with consumers avoiding long-term commitments. They said similar patterns emerged after the death of Diana, Princess of Wales, and during the Gulf War.

Sellers of luxury goods also tend to be affected, as people feel guilty at showing signs of self-indulgence during a time of mourning. And shares in Porsche, the upmarket car-maker, have fallen 18 per cent in Germany.

A spokesman for the British Retail Consortium said: "Shopping is not the first thing on people's minds when you get something like this. They stay in and watch TV. There is a period of mourning and then things start to get back to normal after 10 to 14 days." However, retail executives say consumers are likely to wait for America's response to the attacks before spending again. London is particularly exposed to a conflict as shops, bars, restaurants and hotels are largely reliant on tourist traffic, which has already slumped.

Hamleys, the toy shop with a flagship store on Regent Street, London, said it had seen a marked downturn. Simon Burke, the chief executive, said: "It had a massive impact, there's no doubt. Our sales were about 10 per cent below our expectations, though we are still up on last year."

Most retailers said making meaningful comparisons with last year was difficult because September 2000 was badly disrupted by the fuel crisis. But many said they had seen relatively little impact. Marks & Spencer said: "It doesn't seem to have affected us." The John Lewis department store group would not give figures but said sales were up.

Car dealers also said there had been a limited impact so far. Trevor Finn, chief executive of the Pendragon group, which specialises in the Jaguar, Aston Martin and BMW marques, said: "It definitely went quiet for a couple of days but we had a reasonable weekend."

Supermarket operators traded strongly after an initial lull, during which people only bought the bare minimum. Big chains such as Safeway said there had been no panic-buying.

There were mixed signals from the housing market. Winkworths, which has 40 branches in the London area, said: "No one is pulling out over this. Some buyers will sit tight and it is reasonably quiet." But Graham Harris, of the property company Harris Latner, said: "I have been told that people have been pulling out as a result of last Tuesday. I don't think there is any doubt that things are going to be a bit quieter for a while as people take on the repercussions of it all."