High Street fearing Christmas wipeout

As shoppers go online and eye Black Friday deals...

HIGH Streets are facing a makeor-break Christmas as shoppers desert stores and flock online.

A report published today reveals sales of clothing and homeware in shops slumped over the past three months ahead of the crucial festive period.

By contrast, online sales soared, underlining the dramatic shift in shopping habits in the UK.

With seven weeks to go until Christmas, experts are warning that the High Street faces another battle.

Not only are stores struggling to tempt shoppers through their doors, they also face the prospect of millions of consumers waiting for prices to be slashed, including on Black Friday later this month.

The British Retail Consortium said the ‘all-important golden quarter’ – the last three months of the year – had got off to a disappointing start on the High Street as shoppers stayed away.

Latest data published by the BRC and accountants KPMG shows in- store purchases of non-food items such as clothing and homeware fell 2pc in the three months to October 31. At the same time, sales of non-food items online jumped 6.7pc.

Nick Bubb, an independent retail expert, said: ‘Christmas is going to be subdued, it is going to be tough.

‘Black Friday is going to drive more spending, but it will come at a discount.’

The dismal figures come in a crucial week for the industry.

Marks & Spencer is about to reveal another slump in sales and profits in its halfyear results tomorrow, with luxury handbag maker Mulberry set to take a £3m hit from the fallout at House of Fraser.

Fashion chain New Look will reveal today whether an overhaul of its stores has helped lift sales.

Christmas is a critical period for the High Street, but last year sales growth in stores was the weakest for five years.

Tough trading in the festive period led to the collapse of Toys R Us and prompted a string of profit warnings from Debenhams, Carpetright, Mothercare and Moss Bros.

Latest data from Barclaycard also reveals a slump in retail spending last month, with department stores suffering from a 5.9pc drop in sales.

Barclaycard’s findings show that clothing spending also suffered, dropping 2.4pc in the biggest dip since October 2017.

The figures underline the crisis facing department stores, just days after Debenhams revealed it was closing 50 shops, putting 4,000 jobs at risk. Meanwhile, House of Fraser’s new owner Sports Direct is battling with landlords to reduce its rent bill and keep most of the chain’s 59 shops open.

Despite sliding non-food sales, the BRC’s data shows food sales in- store climbed 2.3pc over the past three months.

Bubb said: ‘It’s symptomatic of tough times on the High Street, with non-food bearing the brunt of it because that’s where consumers seem inclined to cut back.

‘There’s no reason why that’s going to change, with Brexit coming up and a subdued housing market.’

The Chancellor is under pressure to provide the High Street with more help after being criticised for not going far enough in his Budget. Philip Hammond pledged to help smaller retailers last month by offering £900m in business rates relief.

Paul Martin, UK head of retail at KPMG, said: ‘The Budget highlighted efforts to relieve some of the pressures on the High Street, but didn’t go far enough to address the concerns of many retailers.

‘With the potential implications of a hard Brexit added to the mix, retailers now need to juggle contingency planning alongside the busiest time of year.’