For the past few months, the London mayor’s office and Transport for London, the local government body that oversees the city’s road and underground networks, urged denizens to work from home if they could, or at least to alter their daily journeys in order to avoid overcrowding during the Summer Olympics.
Clearly, a lot of Londoners listened.
One week into the 2012 Games, with an estimated 1.5 million people working from home, central London retailers have seen footfall — and sales — drastically reduced. Road traffic is light, luxury hotels have seen a dip in their occupancy rates between the opening and closing ceremonies, restaurants have empty tables, and the cab drivers are complaining.
“The Olympic Games have been a complete and utter disaster. The shops are empty, the bars are empty, the restaurants are empty,” wrote Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, in The Daily Telegraph this week, adding that cabbies are 20 to 40 percent down on their usual income.
Indeed, London traders of every stripe are hoping that Olympics-shy shoppers and British tourists come to town in the second week of the Games. The Games end Aug. 12.
The New West End Company — which represents businesses on Oxford, Bond and Regent streets — estimated earlier this year that retailers in London’s West End would make 16.6 million pounds, or $26 million at current exchange, in additional revenue as a direct result of the Olympics.
But earlier this week, they were forced to take action to drive shoppers back into the town center.
“We have been working on measures to reverse the significant drop in retail spending and visitors into the West End,” the company said in a statement that was sent to its member retailers, and which was seen by WWD. “The forecasts for this summer predicted a different trading pattern and the lack of London workers and domestic visitors has been quickly apparent as a result of Transport for London traffic demand management.”
Starting next week, the New West End Company is planning a “Welcome Back London” marketing campaign, free parking on Aug. 18 and 25, direct mailings and ongoing social media activity to stimulate footfall.
On Thursday, a spokesman for the New West End Company said, “The stores in the West End have never looked better, and research has found that people often shop later, toward the end of the Games. We need to look at August as a whole, and we’re anticipating a huge amount of Middle Eastern visitors here in the second half of the month. We won’t have a fuller picture until September.”
Experian, a retail analyst, said it believes Westfield Stratford City, the shopping mall adjacent to the Olympic Park in East London, has been the big winner at retail. “Although shopper numbers have fallen in East and West London year-over-year, we think this is a result of people mainly going to the shopping center adjacent to the Olympic Park,” Experian said this week. “There are instances of retailers located there who are experiencing an uplift in footfall traffic of more than 50 percent since Sunday. With our analysis also revealing that Web site visits to retail sites have increased by 15 percent year-over-year, it looks like consumers are preferring to shop from the comfort of their sofa while watching the Olympics on the TV.”
Westfield, which operates megamalls in Stratford and in West London, confirmed there was “strong growth” in footfall in the east, in line with the buildup of visitors to the Olympic Park. The company was more vague, however, about performance in its western outpost.
“Although Games events have changed trading patterns, Westfield [in West London] has seen an increase in year-over-year footfall across certain days of the Games. It is too early to determine what impact the Games will have on trade generally; however, Westfield Stratford City has seen an increase of sales across different categories such as food, sportswear and Games merchandise.”
Back in the center of town, retailers are putting on a brave face.
“It’s been a bit of a roller coaster — every day has been different,” said Ed Burstell, managing director of Liberty. “The regular local London customer has clearly fled the city, and the tourist traffic has been sporadic. We are trading just slightly up to last year, and luckily we benefit from our location between Regent and Carnaby streets. But from what I see and hear, it’s a bloodbath around town.”
He added that at Liberty’s pop-up shop at Westfield Stratford City, business has been “off the charts, surpassing plan every day.”
One London retailer who specializes in luxury accessories, and who spoke on condition of anonymity, said: “There’s been very low footfall in the West End and Oxford Street. I would say it’s down about 30 percent. Knightsbridge is about 50 percent down. Every English person has been told to stay away, and visitors who normally come to London in August did just that,” he said.
The retail games aren’t over yet, however. Richard Dodd of the British Retail Consortium, a trade association, said he remains optimistic there will be a boost from the Games.
“What people are really focusing on is Oxford Street, which is only part of the overall picture. The West End is not the only place where people shop. Homing in on one area doesn’t give you an accurate picture of what is going on, and we won’t have any real visibility on the situation until the beginning of September,” said Dodd.
There’s always hope for a post-Olympics halo effect. According to a report from Visa, an Olympic sponsor for 25 years, the Games will bring a 5.1 billion pound, or $8 billion, economic stimulus to Britain between now and 2015.