Retailers brace for Christmas Scrooges

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The Independent Online

The high street is facing its worst Christmas since the aftermath of the 9/11 terrorist attacks, according to a survey published today amid growing evidence that retailers are already cutting their prices.

The high street is facing its worst Christmas since the aftermath of the 9/11 terrorist attacks, according to a survey published today amid growing evidence that retailers are already cutting their prices.

Households plan to spend just 2 per cent more than they did last Christmas, the worst since the 1.4 per cent growth in 2001, according to the accountancy firm Deloittes.

Roger Bootle, its economic adviser, said: "Given that the household debt burden is already historically high and that the housing market slowdown has yet to find its full force, a bumper Christmas may leave consumers with an almighty hangover.

"Even lower interest rates in 2005 are unlikely to stop consumer spending rising at its slowest rate in 13 years."

Fears of a tougher Christmas than last year have already prompted a slew of retailers to start discounting in earnest - with nearly four weeks still to go.

Most of the high street's biggest names, such as Marks & Spencer, Tesco and Debenhams, have already held one-off sale days in an attempt to lure in customers.

Nick Bubb, a retail analyst at Evolution Beeson Gregory, said: "We think that the housing market downturn is starting to hurt the consumer, that retailer pricing power was badly damaged by last year's pre-Christmas promotions and that the boom in online shopping is sapping high street activities." He warned that more "panic promotions" were likely next week.

Although last year an eleventh-hour shopping rush rescued retailers, analysts are less confident that shoppers will repeat the favour this year. Unseasonably warm weather is not helping people to think of Christmas, analysts believe.

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