High Street is braced for bleak Christmas
BRITAIN’S High Street faces a bleak Christmas amid warnings that heavy discounting is failing to lure shoppers away from the internet.
The year-on-year drop in footfall at small stores, shopping centres and retail parks will accelerate this month as even more people go online to buy their festive gifts, according to experts.
It comes on the heels of disappointing Black Friday sales in November, piling further pressure on retailers. And although Christmas is traditionally the period of peak sales, analysts now fear it will offer little respite.
Diane Wehrle, of retail research firm Springboard, said shops had desperately turned to discounting to slow the exodus of shoppers online, but had done this so often that special offers for Black Friday and the festive season now failed to make an impact.
She said: ‘There has been huge amounts of discounting all through the year, and so by the time you get to Black Friday and Christmas people have grown used to having 20pc off.
‘Ultimately you reach a point where profit margins are not just eroded but are almost completely gone.
‘Retailers have opened Pandora’s box and it is now going to be very difficult to close it again.’
Richard Hyman, a retail consultant, added: ‘If you have sales on most of the time, you are effectively teaching consumers to wait until you have sales on before they buy anything. ‘But that is what retail as an industry has been doing for some years, and Black Friday is just the most extreme example. ‘I had already been expecting performance this Christmas to be poorer than previous years, but after Black Friday turned out to be a damp squib it is now coming from an even lower base. There are going to be several retailers going into 2019 quite far adrift from where they will want to be.’
It comes after a punishing year that has seen a number of chains go bust, with many others complaining about tough conditions, expensive rents and crippling business rates. The Mail has been campaigning to save Britain’s High Streets and has called on the Government to level the playing field on business rates between online giants and bricksand-mortar shops.
Chancellor Philip Hammond recently announced £900m worth of business rates relief for retailers but it was dismissed by Sports Direct and House of Fraser owner Mike Ashley (pictured) as ‘the work of a child’.
According to Springboard, yearon-year retail footfall fell by 3.2pc in November despite Black Friday sales. It also forecast a drop of 4.2pc this month, compared with a drop of 3.5pc last year.
An economic report published by accountant KPMG today also warns that rising interest rates and inflation could put further pressure on consumer spending.