London experienced its second-weakest sales growth for more than two years in January, with the sales increase just half the average of 2007, according to the British Retail Consortium's (BRC) London Sales Monitor.

Like-for-like sales were up 3.7 per cent in the capital last month, compared with a 6.6 per cent annual increase in January last year.

The BRC said that growth was “well below” the 6.2 per cent fourth-quarter average and the 8 per cent growth for 2007 as a whole.

However, London continued to outperform the rest of the country, thanks in part to heavy discounting in the clearance Sales. Widespread discounting delivered some improvement in many sectors during the month, but often at the expense of margins.

Clothing and footwear were the hardest hit, along with homewares, although higher-end fashion and accessories remained popular with high-spending overseas visitors. Travellers from Western and Eastern Europe were the main tourist shoppers in Central London, while US and Japanese visitors continued to stay away because of weaknesses in their currencies.

Footfall showed a modest increase from December, but remained lower than the same period last year and dropped off after the Christmas clearance Sales had ended. Footfall was weaker in London than in the country as a whole, where it was slightly higher than a year ago.

Tourist spending January 2008