GOING WEST â - London Chamber of Commerce and Industry

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3. The Impact on businessConcurrence of evidence, conflict of conclusionsIt is reasonable to assume that many of the impacts of the scheme on business in thecurrent area will also be felt by businesses situated in the WEZ. The LCCI hasconducted two retail surveys and one survey of restaurateurs over the past threeyears to gauge the impact of congestion charging on businesses that are locatedwithin central London. The results have consistently shown that businesses basedwithin the congestion charging zone have suffered. Research produced by TfL hasreturned many similar results to the LCCI and yet the conclusions they draw are verydifferent.The company directors interviewed by the LCCI for this report were asked for theirimpressions of the existing c-zone. Some 77 per cent of respondents felt that thecurrent scheme has had a negative impact on business, with 19 per cent perceiving aneutral impact and only 4 per cent feeling that the congestion charge has been goodfor business. Simon Tarr, general manager of After Noah Retail, said: “Thecongestion charge scheme is badly administered, had no major impact on traffic butdid impact negatively on business.”The research conducted by TfL themselves also clearly shows that businesses havenot benefited from the charge. The most positive result concerning business impactthat TfL were able to extrapolate was that 31 per cent of businesses they surveyedreported that it was easier to get to business meetings. 10 As the CEBR points out,this leaves the clear majority - of 69 per cent - who have found that it is no easier toget to business meetings. Furthermore, 73 per cent of TfL respondents found that itwas no easier for employees to travel to work. 11The John Lewis Partnership published sales data that demonstrated the impact ofthe congestion charge on their flagship store on Oxford Street (in the existing c-zone). This data, analysed by Professor Bell of Imperial College, compared resultsfrom before and after the scheme was introduced. Changes in sales patterns wereanalysed by comparing results from the Oxford Street store with its sister stores inother areas of London. This research led to conclusions that the Oxford Street storehad seen a reduction in sales of 7-11 per cent. 12 With small businesses dependenton narrow profit margins, it is clear that many independent shops would suffergravely from a similar downturn in sales and profits as John Lewis recorded. Onestore manager in the WEZ said: “Only big stores will survive if the WEZ comes intooperation, small businesses do not have the financial backing.”The retail sector: bearing the bruntAccording to the CEBR there are 10 per cent more retailers as a proportion of thetotal business numbers in the WEZ than in the existing central zone. The WEZ isheavily dependant on the retail sector and it is almost certain that retail will suffer asa sector more than others. It for this reason that so many retailers have beenapproached for the compilation of this report. Results from surveys of retailers withinthe existing charging zone illustrate the damage to retail that is inflicted by thescheme: some 84 per cent reported a fall in takings since the charge wasintroduced. 13 Of those who reported a fall in sales or customer numbers, a significant15
62 per cent attributed this fall to the introduction of the congestion charge which is sixtimes higher than the proportion of those who attributed the drop in sales orcustomers to the general economic slowdown (the next highest factor).Despite a slight up-turn in sales figures over the Christmas period, consumerconfidence has been low for a significant amount of time. Ed Stansfield, of CapitalEconomics, has said: “With unsecured debt servicing costs at a record high, weexpect households to remain reluctant to pay for spending by borrowing, helping toensure that household spending shows little recovery this year.” 14 This was borne outby comments made in our survey. Sophie Oliver, director of Coco Ribbon Ltd, said:“The retail economy is already pretty bad… with the congestion charge, you aresaying, ‘don’t come into the area’.” Ms Oliver illustrates how a traffic measure whichparticularly affects the retail sector is seriously unhelpful at a time when the sector isalready suffering.The WEZ economy also relies heavily on the restaurant sector with 10 per cent morerestaurants proportionately in the WEZ than in the central zone. 15 Some of the mostdramatic findings in our previous surveys on the impact of charging on the existingzone have come from restaurants. From our surveys of restaurants, 75 per cent ofrespondents reported that they had suffered a fall in takings since the introduction ofthe original congestion charge. 16 Some 43 per cent of restaurants had reduced staffsince the introduction and 35 per cent had considered re-locating. A total of 79 percent of those surveyed did not support the extension of the congestion charge in theWest. Boris Radanovic, manager of My Old Dutch restaurant, stated that: “I don’t seeany positive aspect at all [of the charge moving west].” Another King’s Roadrestaurateur who had already reduced staff in his restaurant in the central zonepredicts a 15 per cent drop in lunchtime takings and the possibility of having toreduce staff numbers further.Predicting the impact in the WEZInterviewees were also asked how they expected the western extension of thecharge to affect their business. The response was unambiguous with some 82 percent believing that the charge would have a negative impact on their business. JamieGraham, director of Graham and Green Ltd, explained how he viewed the charge:“We’re going to be fined for doing business basically.” Many company directors thatwe spoke to saw the charge as being fundamentally and intrinsically damaging to thebusiness community. Robin Kern, director of Hotspur Ltd, voiced a common concern:“Traffic is the lifeblood of the city and if you take the traffic away, the city dies.”Predictions about how business will be damaged were varied. Andrew Madley,assistant store manager at Bang and Olufsen, believes that the impact has two mainforms: “not only will the number of clients decrease, but we will also have increasedexpenses through delivery.”Whilst the overwhelming majority of businesses predicted a negative impact from theextension of the charge, 14 per cent opined that the charge should have little or noimpact on their business whilst just 4 per cent forecast a positive change to theirtakings. Some sectors and businesses will obviously be affected less than otherswhich was neatly shown by Helen Johnston, marketing manager of Altergraphics Ltd,who said: “I can’t see it affecting our business too much as we are an online greetingcard company.” Representing one of the few companies who feels the charge hasimproved - and will continue to improve – business, Brian Backman, consultant for16
Page 1 and 2: GOING WEST -Recommendations based o
Page 3 and 4: The London Chamber of Commerce has
Page 5 and 6: Trotters (King’s Road, SW3), Rich
Page 7 and 8: Executive Summary• February 2006
Page 9 and 10: 1. IntroductionThe purpose of this
Page 11 and 12: 2. Views on the WEZValue for money?
Page 13 and 14: Secondly, as Annie McDonald, manage
Page 15: According to the store manager of o
Page 19 and 20: shown that ‘the combined impact o
Page 21 and 22: 4. Towards a better congestion char
Page 23 and 24: suspension of the congestion charge
Page 25 and 26: ConclusionThe attitude of businesse
Page 27 and 28: The LCCI would like to thank the fo
Page 29 and 30: Pantalon Chameleon, Retailer, SW6Pa
Page 31: 12. Will the Mayor’s proposal to

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GOING WEST â - London Chamber of Commerce and Industry