Discounts to tempt shoppers

High street shoppers have begun efforts to tempt shoppers into making more Christmas purchases by cutting prices. Last weekend Debenhams offered customers a 20 percent discount, while Marks and Spencer introduced a three-for-two gift offer and Boots on Bond Street offered cardholders extra advantage points. Many other retailers are employing similar stunts.

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According to the FT, these controlled reductions and offers are very different from last year’s early reductions in a desperate bid to discard unwanted stock. And although this year may be more challenging for retailers than last year, it is not to say that this Christmas will not be successful.

Although official figures have shown that sales figures for the three months to November were only up 2.2 percent on last year, with the annual growth rate dropping from 5.6 percent last year, retailers appear to be better prepared for difficult conditions. “There is lower sales growth year-on-year than last Christmas, so in that sense it will be worse for retailers,” Richard Hyman of Verdict Research told the FT. “However, the end part of this year will be the best part for sales growth. What this suggests is that retailers are used to low levels of growth and have planned accordingly.”

Despite all the sales stunts employed by retailers to entice shoppers, we will have to wait until January for trade updates. The FT predicts “grim reading for some retail investors”. According to FootFall, the number of shoppers last week had dropped 9.9 percent from last year, while in the five weeks until last year, shoppers numbers were down 3 to 5 percent.

Those to be hit hardest will certainly be knocking percentages off prices in the hopes of salvaging what has been lost. Loss-making French Connection has started advertising 50 percent discounts, while fashion chain Hobbs has begun offering products at 30 percent off.