Shoppers look for attractive bargains

Retailers on both sides of Atlantic suffer and some will also be left with high unsold inventory

The Christmas shopping frenzy may be over but there are signs on both sides of the Atlantic that bargain- hunters are seeking deeper discounts, raising questions about retailers’ profitability over the crucial holiday trading period.

In London, where Boxing Day is a public holiday and one of the busiest shopping days of the year, retailers were encouraged to see increased online shopping and a rise in footfall through stores. Footfall in the UK was 1.5 per cent higher than last year, according to Springboard, the retail data analyst.

But despite the UK’s economy recovery “taking hold” this year — in the words of Mark Carney, the governor of the Bank of England — there was uncertainty about how far shoppers had prised open their wallets. This will only become clear in next month’s retail trading statements.

In the US, the end of year winter season had been expected to be the worst since the start of the economic recession in 2008.

Uncertainty over consumer confidence, and the effects of a late Thanksgiving, which cut six days from the traditional pre- Christmas shopping season, spurred retailers to introduce unusually big price cuts this year.

Latest figures suggest that the strategy had succeeded in getting customers to open their wallets. According to MasterCard Advisors SpendingPulse, which tracks customer spending, sales rose by 2.3 per cent between November 1 and December 24, up from 0.7 per cent in the same period last year.

But, as in the UK, questions remain over the retailers’ margins.