(posted 7381 days ago)Evening Standard
'Cost to companies could top £250m'
By Jonathan Prynn, Consumer Affairs Editor
9 February 2004The first year of the congestion charge has hit business hard in central London, traders claim.
Shops and restaurants on Oxford Street alone believe they are £100 million worse off as a direct result of customers staying away. Across the West End as a whole, the total could be at least £250 million, it is feared.
The campaign against the charge has been led by department store chain John Lewis, which pointed to the stark contrast in the financial performance of its shops inside and outside the zone.
Sales at its flagship Oxford Street store were down two per cent in the first six months of the charge, compared with a 10 per cent surge in takings at its shop in Kent's Bluewater centre.
Director Paul Burden said: "We were concerned before the charge came in that not enough research had been done to establish what impact there would be on the flow of customers into the West End.
"It remains our feeling that the underperformance at Oxford Street cannot be explained by other factors. The strength of other shops outside central London... suggests there is a special negative factor at work."
The chain has commissioned Professor Michael Bell of Imperial College London to research how badly Oxford Street has been hit.
An Evening Standard analysis of the impact across the zone reveals that: A third of retailers are thinking about quitting central London. A quarter said they have cut staff, with sales in the area down by between five per cent and 20 per cent.
The number of central London shoppers was down by an average 11.6 per cent over the first 50 weeks of the charge, said retail analysts Footfall. For Greater London outside the zone, the fall was 2.1 per cent. At Bluewater, shopper numbers rose two per cent and sales were up four per cent.
Restaurant takings in central London are down between five and seven per cent said Mike Gottlieb, Restaurant Association president. Some areas have been hit far harder. Augustinho Vivairos said his tapas bar on Kennington Lane has seen a 50 per cent fall in trade since last February. "We're ruined," he said. "At lunchtime it's dead."
Smithfield meat market trade fell an estimated 20 per cent over the past year. Gary Lawrence of the Smithfield Tenants Association said: "Our customers are businesses and restaurants from all over the South-East but quite a few don't come here any more." Business organisations said the situation is desperate for hundreds of firms, with the lost trade often making the difference between profit and loss, or even survival and bankruptcy.
Colin Stanbridge, chief executive of London Chamber of Commerce, said: "We take no pleasure in pointing out that our research has shown there is a real and pressing downside to the congestion-charge experiment."