High Street shops experienced a worrying decline in customer numbers and sales in the days leading up to Christmas – with sales expected imminently. The challenges indicate that retailers are burdened with a significant amount of festive stock that will need to be sold off in the sales.
Numerous retailers have already initiated online sales, while substantial discounts are expected when stores open their doors in the week between Christmas and New Year’s celebrations. Preliminary data on the performance of UK retail in the last full trading week before Christmas reveals that footfall was down by approximately 11.4 per cent compared to last year, according to Rendle Intelligence and Insights.
On “Super Saturday”, traditionally the busiest shopping day of the year and the final Saturday before Christmas Day, footfall was only 4.1 per cent higher than the previous Saturday and just 0.9 per cent higher than the same Saturday the previous year. Diane Wehrle, CEO of Rendle, commented: “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 depend on the three-month run-up to Christmas for 20 percent of all annual sales. As such, any failure to meet expectations could spell disaster for many high streets. Official data revealed that UK retail sales in November fell short of expectations despite.
Shops have begun to slash prices early as part of Black Friday discounting, a trend that seems to have continued over the past few weeks. Official GDP figures released this week indicate a stagnating economy, while surveys from the British Retail Consortium (BRC) and the CBI suggest low confidence among both consumers and businesses.
Helen Dickinson, Chief Executive of the BRC, has warned that retailers could face a spending squeeze in the new year just as they launch their January sales. She stated: “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.”
She further noted: “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.”
Dickinson 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 ahead, she cautioned: “With sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs – closing stores and freezing recruitment.”