With 10,000 shops predicted to LAST ‘TOXIC’
the New Year. Although shoppers have spent a record £55billion since Black Friday in November, discounts of up to 90 per cent have wiped out profit margins.
Boxing Day footfall was down 3.1 per cent. Although the overall spend of £4.75billion was high, experts said much of it was lost to discounts.
Professor Joshua Bamfield of the Centre for Retail Research said: “We are expecting about 10,000 shops to close in the next year.
“The greatest sufferers will be the smaller, independent retailers who have to pay high rates and wages while not getting as much business.
“There will be a continuation of the current situation rather than an absolute calamity.”
SportsDirect reduced a Team polo shirt from £29.99 to £2.99. Asos cut a Brave Soul Tara Frill Shoulder Vest from £15 to £2 and Debenhams slashed the price of a ladies’ Tog24 crewneck top from £30 to £5.
The Entertainer cut some prices by 80 per cent and there is 60 per cent off at Gap and Topshop and 50 per cent off at Next, Oasis, Dorothy Perkins and Miss Selfridge, according to MoneySavingExpert.com.
Julie Palmer, of insolvency experts Begbies Traynor, said: “Retailers are relying on discounting tactics, either heavily cutting prices or giving vouchers to customers, in the hope of increasing sales. But this is to the detriment of profit.
“To say 2018 has been a tumultuous year is something of an understatement.”
Mintel retail research director Richard Perks said: “Retailers training shoppers to wait for discounts before spending is crazy. They are undermining their own businesses.”
Trade is predicted to slump from £1.2billion a day to just £600million across stores and online after the school holidays end, figures from the Centre for Retail Research and online trade body IMRG showed. January is set to be the quietest month of the year for retailers.
Prof Bamfield added: “Christmas period spending is up on last year overall. But that hides retail issues.
“Spending in actual shops is slightly down, so the overall increase in spending is due to online spending increasing.
“Just looking at footfall numbers does not show the full picture. Days like Black Friday see a lot of people browsing and checking prices, but not actually buying, whereas days like Boxing Day see most people buying because they believe prices are the lowest they will go.
“There is also a trend for postChristmas sales shoppers to get all their shopping done in one go, rather than 20 years ago when people would still go to the sales in January, or 10 years ago when shoppers would go a few times after Christmas.”
Prof Bamfield said there was “no doubt” other high street stalwarts would struggle, as the future of stores like Debenhams and House of Fraser remains unclear.
He said: “The large retailers will continue to look at the number of stores they have and try to reduce that number. This will cause problems for the smaller communities in middle-ranking towns.
“But the areas hit the hardest will be those already hit by recession and industries closing, such as the North, the Midlands and Scotland. They are not attractive places to open shops as people don’t have the money. High street shops have already pulled out of these areas, just like the banks.”
Prof Bamfield added: “Brexit is important but the Government needs to develop a policy to deal with the decline of the high street. Business rates are too high for stores to compete with online competitors.”
The grim predictions for the £366billion-a-year industry come just a month after research firm Local Data Company revealed the number of empty shops, pubs and restaurants soared by more than 4,400 in the first six months of 2018.
The high street crisis has cost