Desperate high street chains are launching early Christmas sales amid a slump in takings.
Big names including Debenhams, House of Fraser and Currys are offering discounts of up to 66 per cent, with a record amount of stock on sale.
High streets are suffering their worst trading conditions in a decade, with some store sales down 5.2 per cent on a year ago and industry reports suggesting the number of shoppers is falling.
It has forced many retailers to push the panic button and cut prices, with targeted sales expected to run all the way through Black Friday on November 24 to Christmas. Black Friday, so named because it’s the day retailers ‘move back into the black’, is the busiest shopping day of the year.
The website LovetheSales.com, which tracks the sales and offers of 800 retailers, has found a record number of deals. It said 37 per cent of products were on sale, up from 26 per cent at this time last year.
Stores have a massive stock of coats, shoes and woollen items left on their shelves because of the warm autumn. There has also been a slump in sales of household appliances, TVs and furnishings, triggering big price cuts.
Debenhams has been running a ‘winter event’ with 30 per cent off coats and knitwear and up to 66 per cent off electricals, while House of Fraser has deals on party wear. The reductions bring John Lewis into the battle under its price-match promise.
Gap, which is struggling in Britain, has sales of 50 per cent on winter clothing. Reductions of up to 40 per cent are promoted on the H&M website and Topshop has savings of up to 60 per cent.
Currys is promoting savings of £400 on TVs.
However, retail analysts warn that the early sales amount to a dangerous exercise in self-harm. Stores lose out because they are forced to cut their profit margins and they also face a huge delivery headache for items bought online.
Stuart McClure, of LovetheSales.com, said: ‘Over the last couple of years, the shopping cycle has changed, with Christmas consumer spending stretching for many weeks. Normally, we would expect the volume of products to increase slowly throughout November, to peak around the Black Friday week. However, with a record number of products already on sale, there’s not much to be added.’
He added that many firms who had refused to take part in Black Friday in the past will be running deals this year ‘amid fierce competition for customer spend’.
A high street sales tracker by accountants BDO makes clear that retailers face a tough time, with the 5.2 per cent sales slump in October the biggest fall for the month in ten years. BDO’s head of retail, Sophie Michael, said: ‘The sharp decline in October sales will no doubt bring anxiety to UK retail in this critical trading period.
‘With margins already tight and Black Friday looming, retailers will be working even harder at promotional activity and product differentiation to convince the reluctant shopper to spend with them.’
British Retail Consortium director-general Helen Dickinson said shopping activity had ‘slumped’. She added: ‘Retailers will have cause for concern as they prepare for the crucial run-up to Christmas.
‘Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious.
‘The Chancellor should reflect on this disappointing state of play and deliver a Budget that allays the risks of a further slowdown in consumer spending, by keeping down the cost of living. In other words, a shopper’s Budget.’
Retail analyst Richard Hyman said the Black Friday sales and the huge sums spent on Christmas TV commercials were self-inflicted wounds.
‘It is the season of retail self-harm. Only those retailers already hooked on these margin-eroding drugs will be doing either this year,’ he said. ‘As what used to be the golden quarter unfolds, retail distress is unfolding still faster.’