Retailers face 2013 gloom as Britons prepare to save
Pressures set to grow and drive high-street stores to close their doors for the last time
Retailers are being warned to brace themselves for a tough 2013 after the first shoppers' confidence figures since the crucial Christmas trading period revealed almost two-thirds of Britons plan to cut spending over the next six months.
Shares in retail stocks tumbled after retail analysis from Conlumino showed that 59 per cent of consumers intend to spend less at Britain's shops over the next six months, with only 2.6 per cent planning to boost spending in 2013.
In response, Marks and Spencer shares were down 3.4p, to 382.3p; J Sainsbury fell 1.9p to 345.1p; N Brown, the catalogue retail giant whose brands include lingerie-seller Figleaves, was off 6.5p to 369.8p. Meanwhile Britain's biggest retailer, Tesco – which issued its first profit warning in more than two decades last January after a poor festive trading period in 2011 – lost 0.2 per cent to 336.6p. Its shares tumbled 14 per cent last year, down from 390p at the start of last January.
The retail sector's fallers crossed the shopping spectrum, including homeware brands such as Carpetright, down 5p to 680p, and Next, down 4.4p at 3703.6p. Next has an established online business, but figures from credit-checking group Experian showed that although Christmas Eve and Christmas Day saw year-on-year increases of 86 per cent and 71 per cent respectively in visits to online retailers, this fell to only 17 per cent on Boxing Day.
Despite some retailers claiming record takings over the festive sales period, the British Retail Consortium is warning this year will be an "ongoing endurance test" for retailers. It is campaigning for the Chancellor George Osborne to halt April's planned increase in business rates, which will hit shop-owners with a £175m bill.
"With the economy bumping along the bottom in the New Year, real incomes still under pressure and consumer confidence low, retail sales can be expected to remain in the doldrums," warned Clive Black, retail analyst at Shore Capital. "With the internet continuing also to gain share, the plight of the high street, the secondary and tertiary towns and retail parks in particular is especially challenging.
"Most retailers, especially supermarkets and the rag-trade, will be praying for a good spring/summer of weather after three grim years, which could help matters – with no Jubilee or Olympics to come. However, grinding out is expected to be the theme. Many small high-street retailers will, sadly, close their doors for the last time through the year."
The proportion of vacant shops in town centres is presently at a record 11.3 per cent, thanks in part to high-profile retail failures including video-games retailer Game, greeting-cards group Clinton Cards, sportswear chain JJB Sports and outdoor-goods group Blacks Leisure. Though each re-emerged in some form, hundreds of stores were closed.
Neil Saunders, managing director of Conlumino, added: "January is when consumers really start to take stock and that's when we expect the realities of a Christmas on credit to start to have an impact on confidence. The outlook for the start of the year does not look too rosy.
"In terms of sales performance, 2012 will probably end on a bit of a high but retailers should be under no illusions that the consumer remains under significant pressure and most households intend to cut spending as they go into the New Year. As such, reports of a bumper sales period should not be taken as the beginning of the end of the consumer downturn."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...