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London Retail Sales Tumble To Cast Doubt On The Sector's Recovery Curve

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London's retailers will today create shockwaves by posting their worst monthly sales for four years, ahead of results this week from some of the UK's biggest store groups that will provide a health check for the high street leading up to the critical Christmas trading period.

The department stores Debenhams and John Lewis, the fashion retailers Next and French Connection, the DIY group Kingfisher, and the furnishings chain Dunelm will all update the market this week. Further August sales data will be unveiled by the Office for National Statistics on Thursday.

The British Retail Consortium said that like-for-like retail sales in Central London plummeted by 5.9 per cent in August – the first month they have fallen this year after seven months of growth, which has hitherto been partly supported by foreign shoppers taking advantage of the weak pound. Retail sales fell by 0.1 per cent outside of the capital, which was the first time they had been ahead of London's this year, although the gap had previously been narrowing, according to the BRC-KPMG Retail Sales Monitor.

Stephen Robertson, the director general of the BRC, said: "These results don't suggest the recovery is underway. This is the lowest London sales growth since August 2005." He added: "Central London footfall saw the biggest drop for over a year and a half. The pound is less weak that it was, eroding London's appeal for overseas visitors. Like domestic shoppers, tourists are also more cautious." The religious event of Ramadan also began in early August this year, in contrast to September last year, which led to Middle Eastern visitors returning home earlier.

However, the data from the UK and London further confirms a slowdown in the retail sector after robust trading in June and July. While strong retailers, including Morrisons, Next and Kingfisher, which owns B&Q, have already posted profit upgrades recently and the worst fears of store groups about 2009 have not materialised, retailers are still nervous about the crucial Christmas trading period, when most make the bulk of their annual profits, particularly given growing unemployment and the rising savings ratio.

But Mr Robertson pointed out that London's retailers were up against a strong August 2008 – the third highest figure last year – when like-for-like sales actually rose by 8.6 per cent. Last month's better weather in the capital after the downpours of 2008 hit footfall as shoppers favoured outdoor leisure activities.

This week, the comments by Charlie Mayfield, the chairman of the John Lewis Partnership, are likely to be given the most scrutiny given that the eponymous department store is seen as a vital barometer of consumer spend. While trading at John Lewis, which posts half-year results on Thursday, has picked up since the first few months of the year, its stablemate Waitrose, the supermarket group, has been powering ahead – delivering marketing-leading sales recently. Tomorrow, Debenhams is expected to post annual pre-tax profits of about £120m, but is expected to say that its fourth-quarter sales have dipped, partly because of the disruption caused by allocating store space away from costly concessions towards its own-bought ranges, say City analysts.

On Thursday, the ONS is expected to say that sales growth slipped in August. Howard Archer, the chief European economist at IHS Global Insight, said: "The fact is that consumers continue to face serious obstacles that are likely to limit spending for some time to come. These notably include sharply higher and rising unemployment, low earnings growth and heightened debt levels."

The pointless recovery gathers a pace.

We are clearly seeing a propaganda recovery. Can this defeat reality?

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Recession fears receding as confidence returns to UK firms

Most business managers expect to emerge from impact of recession intact

British business leaders are more confident than at any time during the recession that they will make it through the downturn, research reveals today, adding to the growing optimism about the economy.

A survey from Clydesdale Bank shows that 90 per cent of business managers now say they are confident they will make it through the recession, with a third saying they are certain they will not go under.

The research also suggests the downturn may not have had as savage an effect on some companies' business as previously thought. Clydesdale said only a third of the companies it spoke to had actually suffered a reduction in business during the downturn so far.

While economists believe the UK economy began growing again over the summer – and that the third-quarter GDP figures due to be published towards the end of next month will provide official confirmation of this – there is still scope for further problems. Unemployment figures due this week are expected to show another sizeable leap in joblessness to more than 2.5 million, with most projections suggesting the numbers out of work are unlikely to begin falling before the middle of next year.

Mike Williams, a Clydesdale Bank executive, said its research suggested business leaders were becoming increasingly confident about their prospects. "These figures are promising and show that businesses are beginning to regain confidence," he added. "This is a positive sign: where confidence exists growth often follows. It has clearly been a challenging time for businesses, but these figures show there are signs of stability creeping into the market but it is still important to retain a grounded and cautious perspective as the market changes."

Clydesdale Bank, traditionally stronger north of the border, said that companies in Scotland were actually more confident than those located elsewhere in the country, and that companies based in the North of England were more positive than their southern counterparts. This may reflect the greater exposure of the economy in the South of England, particularly in the South East, to the financial services sector, where job losses are continuing.

Clydesdale Bank said it had pledged to make £1bn of new lending available to business borrowers and that it had launched a £100m fund specifically for small business at the end of June. But, leading banks remain under pressure to increase the amount of lending they offer to the business sector, amid continuing complaints that some businesses are being starved of vital credit.

The most recent Bank of England figures showed that the amount being lent by banks to business actually fell over the summer months, despite all the banks insisting that they were doing more. Ministers have threatened the banking industry with further restraints on bonuses, or even new taxes, unless lending increases over the next few months. But sector sources point out that it is facing unprecedented regulatory action, which has required it to increase capital funding at the expense of activities such as lending.

And without a hint of irony in the same paper we have the following.

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London, pah!

What I'm really looking forward to is the opening of the new St David's 2 shopping centre in Cardiff this autumn.

It will add 967,500 sq ft to the existing St David's centre, meaning there'll be 1.4 million sq ft in these two centres alone.

That's in addition to 165,300 sq ft in the Capitol shopping centre, 100,000 sq ft in the Queen's Arcade centre and heaven knows how many thousands of square feet in the traditional streets and arcades.

And that's only in the city centre. There are secondary shopping streets in the residential areas, and loads of retail parks (Culverhouse Cross, Leckwith Road, Newport Road, Cardiff Bay, to name just the ones I'm familiar with - at least three of which are a quarter or half empty).

Who the hell is going to shop in all these places, and with what? Washers?

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Guest KingCharles1st

It's just ~Gordon Brown's EGO RECOVERY!

Well, we were expecting this, weren't we..

So- next to fall, CHRISTMAS!

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