Profit margins wiped out amid ‘ghost shops’ fear

Record £4.7bn splashed out but discounts obliterate Scotland’s high streets

Struggling Scottish shops’ Christmas profit margins have been wiped out by 90% discounts, even though the nation’s shoppers splashed a record £4.7 billion since Black Friday.

Experts have warned of ‘ghost shops’ after New Year’s Day, with shoppers staying at home after a much shorter busy sales period than is traditional.

Shoppers have spent more money than last year despite footfall from Boxing Day being down year-on-year, said the Centre for Retail Research, which carried out British retail’s most comprehensive Christmas study, for VoucherCodes, including interviews with 80 major UK retailers and 1,000 shoppers.

HMV became the first high-profile Christmas casualty, slumping into administration again with more than 2,000 jobs at risk.

Analysts say discounts have obliterated any profit for retailers from some of the cash going through the tills.

Julie Palmer, partner at Begbies Traynor, the insolvency experts, said: “Retailers are relying on discounting tactics, either heavily cutting prices or giving vouchers to customers that buy their products, in the hope of increasing sales. But this is to the detriment of profit.”

Mintel director of retail research Richard Perks said: “Retailers training shoppers to wait for discounts before spending is crazy. They are undermining their own businesses.”

Trade in Scotland will slump from £100 million a day to around just £50m a day across stores and online after schools go back, spending trends data from the Centre for Retail Research and online retail chiefs IMRG showed.

January is to be the quietest month of the year for retailers.

Professor Joshua Bamfield, director of the Centre for Retail Research, said: “Christmas period spending is up on last year overall.

“But that hides issues in retail. Spending in actual shops is slightly down, so the overall increase in spending is due to online spending increasing.”

Picture: Mhairi Edwards. Trade is set to slump in January.

Photography. Picture: Eilidh Robertson Lauren Mutch of Banff and Andrew Houstoun of Blacklunans were married at St Ninian’s and Forglen Church, Turriff.

Picture: Angela Bell Photography. Stacey Butchart and William Wilkie, both Dundee, were married at Harris Academy, Dundee.