PANIC SALES TO SAVE HIGH ST
As stores slash Xmas prices by 80%
desperate stores are slashing prices by up to 80 per cent in a high street bloodbath.
Sales that kicked off on Black Friday last month are expected to continue well beyond Christmas.
It is feared some big chains could even run out of cash.
Price tracking of 800,000 products by accountants Deloitte shows the average discount on sale items is already 44 per cent.
However, retail analysts still expect footfall at stores to be 4 per cent lower than last year.
Seven out of ten high street and
online stores are expected by consultants PwC to be launching sales next week. It is the ‘toughest retail market anyone has ever seen’, according to retail analyst Richard Hyman.
He added: ‘We don’t want to blame Brexit for too much. But the inescapable truth is that it is definitely having an impact. Christmas 2018 will come very late and fail to deliver the respite many in the industry need.
‘Most retailers will enter 2019 with less fat than needed to see them through the weakest trading period of the year. It’s going to be a bumpy ride.’
The dire trading conditions could herald more store closures and further damage to high streets.
Ewan MacDonald-Russell, head of policy for the Scottish Retail Consortium, said: ‘Our Scottish Retail Sales Monitor showed the worst figures in November for 21 months, with nonfood sales hitting a 20-year low.
‘Many retailers will be stretching every sinew to encourage customers into stores. December is a crucial month for retail sales and, after what has been a bruising year for many businesses, it will once again be vital for the industry.’
Mike Ashley, the Sports Direct tycoon who bought House of Fraser out of administration, is making plans to close many of its outlets.
He has also suggested that Debenhams cannot survive without an injection of cash.
Both department store chains are promising savings of up to 60 per cent.
Their rival John Lewis has been dragged into the fray under its ‘Never Knowingly Undersold’ price promise. Other household names such as Gap, H&M, Laura Ashley, Next, Hobbs and Argos are promoting winter sales, mega deals and clearance stock.
Bon Marche issued a profits warning this week and Primark, a leader in cheap fast fashion, has warned of tough trading conditions.
Diane Wehrle of retail experts Springboard said: ‘There has been more discounting this year by retailers. Black Friday was not a success and there is low consumer confidence because of Brexit.
‘A number of retailers will be really pinched in the new year.
‘Fashion and department stores are particularly vulnerable.’
Deloitte said discounts ranged from less than 2 per cent to more than 80 per cent.
It said the average figure would be around 52 per cent from Boxing Day. Bricks and mortar retailers are now losing 40 per cent of festive non-food spending to online rivals. The rest of the year the figure is only 20 per cent.
Black Friday sales also bring forward spending, reducing Christmas crowds.
Deloitte’s Jason Gordon said an over-supply of unwanted stock, caused in part by the mild winter weather, has driven retailers to record levels of discounting.