The London Daily News

01 December, 2008 11:29 (GMT +00:00)

London is bargain capital of Europe

City Desk

The weakness of sterling against the Euro and the US dollar and record price cuts has encouraged "bargain tourists" to flock to the capital before Christmas and take advantage of the sales.

Sales begin this week in the capital in the shopping malls and the West End of London with department stores in certain cases opening early and offering special discounts.

The cuts made to interest rates and VAT may help consumers go out and spend, but one retailer who contacted the London Daily News Simon Aldridge owner of an audio and visual shop in north London said:

"Our sales are down by 40% per cent if I don't get something over the next 4 weeks we will be closing the business down we cannot sustain this type of downturn".

Retail analysts have reported that John Lewis reported a 13% fall in weekly sales compared with the same week last year, B&Q-owner Kingfisher said third-quarter sales fell 9% amid slowing demand for home improvements. Even Tesco is expected to report a drop in its growth to levels of 1992, with the supermarket giant tipped to reveal its worst sales performance since the early 1990s recession, with like-for-like sales growth in its core UK business from 4% this time last year, to between 1.1% and 2%.

Opportunities exist now for discount stores with retail analysts claiming that retailer like "Aldi and Lidl to pounce in the UK", says Daniel Lucht, European retail analyst at Verdict research and co-author of a report on consumer trends.

"As these players widen their store portfolio and the discounter network as a whole they will further drive sales through the channel. A denser discounter store network in the UK will make shopping at the discounters more common and socially acceptable. Past experience suggests that once a discounter opens in their catchment consumers will give it a try."

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