High Street stores suffered an alarming fall in shopper numbers and sales in the final days before Christmas amid fears for the economy.
The difficulties suggest that retailers are weighed down with a largely quantity of festive stock that will have to be shifted in the sales.
Many retailers have already launched online sales, while deep discounts are on the cards when stores throw open their doors in the week between Christmas and the New Year celebrations.
Early evidence of the performance of UK retail in the final full week of trading before Christmas shows that the number of people in the shops was down by around 11.4 per cent on last year, according to Rendle Intelligence and Insights.
On “Super Saturday”, the final Saturday before Christmas Day and typically the peak shopping day of the year, footfall was only 4.1 per cent higher than the previous Saturday and only 0.9 per cent higher than the same Saturday a year earlier.
Diane Wehrle, chief executive of Rendle, said: “The disappointing results … clearly reflect the ongoing cost pressures faced by households following a prolonged period of very high inflation.
“It appears this Christmas has been disastrous for retail, and a bad omen for 2025.”
Retailers rely on the three month run up to Christmas for 20 percent of all annual sales. Consequently, any failure to hit expectations could be make or break for many high streets.
Official data showed that retail sales in the UK fell short of expectations in November despite shops starting to cut prices early as part of Black Friday discounting. And this pattern appears to have continued over the past few weeks.
Official GDP figures published this week pointed to a stagnating economy. At the same time, surveys published by the British Retail Consortium (BRC) and the CBI have pointed to low confidence among both shoppers and businesses.
Helen Dickinson, the BRC’s chief executive, warned that retailers could find themselves facing a new year spending squeeze just as they unveil their January sales.
She said: “Public confidence in the state of the economy took a nosedive, falling 8pts to -27. This created a widening gap between expectations of the economy and of people’s own finances, which remained unchanged.
“The public’s spending intentions – both in retail and beyond – dropped 6pts, with expectations of spending in nearly every retail category falling. If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales.”
She added: “The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7bn of new costs from the Budget set to hit the industry in 2025.”
Looking further ahead, she warned: “With sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs – closing stores and freezing recruitment.”
