Record numbers of shoppers took to Britain's high streets yesterday as retailers offered unprecedented Boxing Day discounts to consumers squeezed by the credit crunch.
Major high street stores were offering price cuts of up to 70 per cent to try to attract shoppers fearful of an economic downturn in the new year. More than 3.6 million shoppers took to the high streets to take advantage of the record price cuts. Kevin Hawkins, the director general of the British Retail Consortium, said that despite better than average sales over Christmas, fuelled by early discounts, retailers were desperate to recoup disappointingly low Christmas profits, especially on white goods.
Mr Hawkins said that widespread concerns over a recession in the coming months had prompted retailers to drop prices in an attempt to stimulate consumer spending.
"It's not inconsistent to have retailers whose profits are falling and whose sales are going up. That's one of the problems of discounting," Mr Hawkins told the BBC's Today programme.
"You offer big discounts to get your goods sold through, because you don't want a lot of seasonal stock left over, but at the same time it's not doing your margins any good. It's worthwhile getting rid of that unsold seasonal stock and I think that's what we're going to see over the next three days."
A rush of sales in the week before Christmas means overall December sales figures will be up on 2006 and retailers expect to surpass last year's year-on-year growth.
John Lewis, which began its post-Christmas sale in Manchester's Trafford Centre yesterday and will go nationwide from today until 13 January, is hopeful that sales will pass the 100m mark for the third week running. "This has been our best Christmas ever and we expect clearance this year to be similarly encouraging. Clearance is firmly embedded in the British shopping psyche," said Andy Street, the company's managing director.
Nick Bubb, a retail analyst at Pali International, said it had been a tough festive season for most high street stores. "It looks to have been a pretty tough Christmas on the high street, with like-for-like sales growth hard to come by without discounting," he said.
"The usual last-minute spending spree will make up for some lost ground, but some damage will have been done to gross margins and share prices are discounting big profit downgrades of one sort or another in January and beyond," he added.
Across the country, however, many retailers remained upbeat about the prospects for sales over the coming weeks. At Birmingham's Bullring, more than 27,500 shoppers flooded through the gates in the first hour of trading, bringing visitor numbers for December up to 4 million.
At Lakeside shopping centre in Essex, early indications suggested sales were dramatically higher than last year. "Takings in the first hour of trading are 1,000 per minute, up 16 per cent on last year," Trevor Croxon, store manager for Lakeside's House of Fraser outlet said.
Steve Chandler, Lakeside's general manager, said: "Boxing Day sales are becoming an increasingly significant part of the retail calendar. We expect to see strong footfall figures continue over the next few weeks." At Brent Cross shopping centre in north London, 10,000 shoppers stormed through the doors in the first hour of trading. More than 100,000 shoppers visited the centre through the day. Staff are expecting to sell two million items today, an average of 3,000 per minute.
Reports of strong sales on the high streets come after an unprecedented number of British shoppers bought their Christmas presents online. Internet sales during the coming weeks are expected to be even stronger.
According to a YouGov poll released this week, one in five Britons who logged on to the internet at some point on Christmas Day bought something. More than 3.5 million shoppers 770,000 more than attended Anglican church services racked up total online sales of around 53m, in what was retailers' busiest Christmas Day ever.
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