December may not redeem high-street sales

Christmas could turn out to be a disappointment for struggling retailers

Twenty-seven shopping days to Christmas – including Sundays – and canny, cash-strapped consumers are watching and waiting to see which of their favourite retailers are going to roll out the best deals.

Even John Lewis is struggling, reporting sales down 3.2 per cent on the same week last year, although toys and technology products for children are doing well.

But while Britons are expected to spend between 1 and 2 per cent more this Christmas than last, our 5 per cent inflation means they will get somewhat less for their money.

At Verdict Research, Maureen Hinton, a retail analyst, paints a picture of unrelenting bad news. "Everything is working against retailers this year," she says. "There is inflation, rising utility and high transport costs, weak growth, increasing unemployment and the prospect of another global financial meltdown."

No surprise then that consumer confidence is at one of its lowest levels since 2008, with more than half those surveyed feeling worse off than this time last year. Families are coping with static wages trailing behind inflation, increasing unem-ployment, and a growing number of young people without jobs – a million at the last count – many of them living at home. As house prices sink, or at best stay the same, those who own their own homes are feeling poorer by the day while private renting is becoming increasingly expensive.

In response, many retailers are offering timed discounts on selected items or having short sales – or billed as short – in a frantic effort to persuade shoppers to buy now. Marks & Spencer was offering 25 per cent off hats, gloves and scarves last week, while in Knightsbridge, Harrods is having a 10 per cent off weekend for store card-holders to kick-start – it hopes – the Christmas season.

At Shore Capital, however, analyst Clive Black believes that although retailers will have a hard time whatever they do, the quality stores will do best. In addition, "we expect that depressed sales in October and November will be followed by a surprisingly good December, but that January will be flat despite the sales."

The main problem for retailers and customers is the uncertainty, both personal and for the economy in general. The result is a customer looking for good value, who is spending from reduced disposable income and dipping into savings rather than running up credit-card bills.

Smaller-ticket items such as cosmetics should do well, as cheering items such as nail varnish and lipstick are always welcome in a stocking. Books and music will be popular, but with much of it being downloaded, rather than arriving in solid form.

Online retailing continues to be the one sunny story, going from a standing start 11 years ago to between 10 and 15 per cent of the total spend, depending on who you talk to. Sales so far are up 14 per cent on this time last year, says IMRG, the online retailing association, while nearly a quarter of smartphone-owners are using their phones to buy goods online. There has also been a sharp rise in purchases through Facebook, and Apple has overtaken Amazon as IMRG's "hot shop" for the first time ever.

So expect presents this Christmas, but just not quite so many.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there