Record-breaking discounts on offer in the post-Christmas sales have so far failed to attract a rush of bargain hunters to the high street, raising fears that Marks and Spencer, John Lewis and Next will be forced to report disappointing trading figures for the festive period.
The number of high street shoppers from Monday 28 December to Friday 1 January was down 3% compared with the same period in 2014, according to research firm Springboard. A year ago, retailers had been celebrating a jump of 6.2%.
Retail experts had predicted a stampede to the shops on Boxing day after retailers offered discounts topping last year’s average of more than 50%. They are desperate to clear cold-weather clothing that has remained on the shelves during record mild weather.
While Boxing Day had offered some hope of a pick-up in trade, the following week – which included a bank holiday – was poor. Shopper behaviour differed markedly in different parts of the country, with footfall down by almost 7% in Wales and by 5.8% in the West Midlands, but up in Scotland and the east of England by 11.3% and 4.5% respectively.
In London and the south-east, the affluent engine of consumer spending, numbers were also in decline, dropping 4.5% and 3.3% respectively. But Springboard figures showed that some of this trade appeared to have migrated to shopping centres, where numbers were up 3.3% in Greater London and ahead by 8.8% in the south-east.
As well as unexpectedly mild weather leaving little demand for winter clothing stock, shoppers are also thought to have been put off venturing out by heavy rainstorms and concerns about potential terrorist attacks.
According to Springboard analyst Diane Wehrle, however, the two biggest factors influencing shopping trends were the increasing popularity of online shopping and consumers’ expectations that retailers would start their discounting well in advance of Christmas.
“High street footfall has been low this year because of the move to online [shopping]. Retail parks have fared better, parly because they are often a place [where] shoppers can pick up a ‘click-and-collect’ order [placed on the internet].
“Building on strong footfall experienced by high streets this time last year was always going to be a challenge, and these figures show there is a job to be done in 2016 in order for a positive uplift to be realised.”
The fashion chain Next, which has largely avoided early discounting, is due to report its Christmas trading performance to investors on Tuesday. It will be followed on Wednesday by John Lewis, while Marks and Spencer, Poundland and Signet Jewelers are due to update investors on Thursday.
M&S did cut prices ahead of Christmas but has otherwise worked hard to protect profit margins. Some of the gloom may be taken off poor performance from its clothing and general merchandise business if food sales are strong, but few believe M&S will have a great deal to cheer about.
Nick Bubb, an independent retail analyst, is reportedly forecasting a 3% drop in M&S’s like-for-like sales, but analysts at Nomura think the decline could be as much as 5.5%.
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