Retailers insist Christmas trade can be clawed back this weekend

Retailers insist Christmas trade can be clawed back this weekend despite a disastrous first half of the golden month of December.

The mood was hopeful that with the help of unprecedented heavy discounting shoppers would spend in the last weekend before Christmas.

However, trade has continued to be weak. Experian figures show footfall last weekend was significantly lower than last year, down 7.1 per cent. BDO Stoy Hayward’s like-for-like club reported sales for non-fashion were down 12 per cent and fashion dropped 9 per cent in the week to Sunday 14.

The gloomy outlook was compounded by speculation that bellwether Marks & Spencer’s sales plummeted last week, in some categories down by as much as 30 per cent.

Debenhams chief executive Rob Templeman echoed many retailers who have spoken to Retail Week. He said this will be a difficult and late Christmas. He added: “If you look at the last time that Christmas fell on a Thursday [2003] the trading build-up seems to be in a similar pattern to then, but against the background of a tougher macro economic climate.”

Blacks Leisure chief executive Neil Gillis said the retailer had planned for Christmas trade to come this weekend. He said: “Customers are playing a game of nerves with retailers, waiting for them to discount. Some are not now prepared to buy if there is no discount.”

John Lewis is confident shoppers have already started spending for Christmas in its stores, but said the coming few days will be even more important. Director of selling operations Nat Wakely said: “The current week is set to be our peak.”

Grocers were more bullish than general retailers about December and said they had fared well, but that discounting on the high street has
led to some shoppers postponing buying.

Tesco launched a half-price Sale last week as it believed shoppers were delaying purchases.
A spokeswoman said the Sale was staged then because the grocer did not want customers to feel anxious about whether the products they bought would be discounted at a later date.

Pre-Christmas discount levels are averaging over 37 per cent of the full selling price, versus just over 34 per cent last year, according to Ernst & Young. Retail director Jason Gordon said the massive discounts mean some retailers’ promotional strategies will be less effective than planned.

He said: “Consequently we expect even deeper cuts in the last-minute pre-Christmas frenzy and January Sales, as retailers desperately try to offload excess stock.”

Retailers fear that more businesses will hit the buffers next year as the real cost of discounting and shoppers reining in spend is felt. Figleaves chief executive Julia Reynolds said: “January and February will be a bloodbath, it will be very tough.”

Others also highlighted that closing down Sales will continue to affect the market. Asda chief executive Andy Bond said that Woolworths’ closing down Sale did affect Asda’s business, but that it was just a temporary hit.

“There will undoubtedly be more [retailers falling into administration] next year and when that happens it sucks the oxygen out of the market for a short period,” said Bond. “But once it’s all over there are opportunities for value-based retailers like ourselves to do well.”