Retailers are expected to cut prices further this weekend in a desperate attempt to capture sales before Britain's big return to work on Monday.
"Most of us have been clearing stock all week but if you haven't got rid of it by Sunday you never will," said one clothing chief executive. "Demand has been fairly constant, people are buying lots in the sales - the expectation is they will disappear for a while after that." He said sales had been up to 20% below last year's levels during the pre-Christmas weeks despite the hefty discounts on offer.
Bargain hunters have been out in force since Boxing Day, but new data suggests the strong demand witnessed during the sales period has not salvaged a poor Christmas overall for retailers. Shopper numbers in December were 3.1% lower than last year, according to Experian, a research firm that tracks high-street footfall. Separate research by PwC found 42% of the consumers it polled had budgeted to spend less in the sales. "Retailers will cut prices further over the next few days as they need to grab as much trade as possible before the consumers ... lose interest in shopping," said Jonathan de Mello, Experian retail director. But he predicts that even aggressive discounting might not be enough to shift unsold Christmas stock, meaning the January sales could linger into February.
Concerns about the retail sector have been fuelled by a stream of bad news with 10 retailers including Woolworths, MFI and the Pier as well as clothing chains USC and The Officers Club collapsing in the last two months. The struggling childrenswear retailer Adams was confirmed as the latest casualty yesterday, with PwC appointed to handle its administration.
Rob Hunt, a joint administrator, said: "We are continuing to trade as we urgently review the company's financial position so as to assess which stores can remain open. Adams Kids is a well-known brand on the high street and we remain hopeful that it will prove attractive to a purchaser. However, the current difficulties in the retail environment are such that some store closures are likely."
Indeed, the January sales are expected to be the last hurrah for consumers as recession bites. Groups such as John Lewis and Debenhams are thought to have enjoyed a strong sale period over the 10 days from Boxing Day until this Sunday. "The first six days of the sale have been very strong and we expect that to last until Sunday, after that sales volumes and footfall will drop rapidly," predicted one senior retailer. "People are being conservative, but are responding to big discounts."
A picture of how quoted store groups have weathered the storm will start to emerge next week when the retail reporting season gets under way with updates from large chains such as Marks & Spencer, Debenhams and Sainsbury's. Analysts expect a mixed bag of results with the supermarkets expected to have fared the best.
