Nearly 45,000 retailers are in financial distress this Christmas, as a snowy weekend and the squeeze on consumer spending-power hits sales
One reason for flagging sales this Christmas may be because of Black Friday. Despite the most protracted squeeze on
household income in memory, officials at the Office for National Statistics said the American-inspired promotional event had helped drive a 1.1% increase in the number of goods.
Julie Palmer – retail expert for Begbies Traynor – noted the disappointing sales for retailers: “The increasingly frantic promotional and discounting activity we are seeing this week across the high street is simply not having the same effect on consumers as it once did,” she said. “UK shoppers are savvier than ever and prepared to search online for the best deals, having grown wise to the gimmicks and discounts on offer in store, which many now realise may not be as good as they first appear.”
It also comes as research agency YouGov has predicted households to lower their Christmas spending – this time to its lowest level since 2012.
Their ‘Christmas Spending Intention’ report reveals that the average British household (celebrating Christmas) will spend £751 for the festive season on gifts, food and drink, decorations, trees and cards this year, down from £780 in 2016.
The study shows a socio economic divide in intentions to cut back at Christmas. Those in the ABC1 social grade are expecting to reduce their spending on food and drink by 5%, while those in the C2DE group are anticipating spending 1% more.
Furthermore, 58% say they simply have less money to spend this year, while 46% want to reduce how much they consume/buy during the festive season. One in five (21%) say they have set a budget this year.
In the battle for Christmas sales, H&M is offering up to 60% off, while Debenhams, House of Fraser, French Connection, Gap, New Look and Dorothy Perkins are offering up to 50% off. This may have been driven by a 21% drop on Sunday 10 December, when there was heavy snow across the UK.
Retailers that have been affected by warmer-than-usual weather in Autumn have held back on sales of coats and knitwear, while a slowdown in the housing market has left furniture and DIY chains worse for wear.
