The never ending Christmas sales: How panic over dire high street spending has forced stores to slash prices by 80 per cent to survive ‘bloodbath’ amid Brexit fears – with some big chains fearing they will run out of CASH
- 7 out of 10 retailers are expected to launch their sales well before Christmas
- Average discount on sale items is already 44 per cent and set to rise, say experts
- Discounts of up to 60 per cent at Debenhams, House of Fraser and John Lewis
- Gap, H&M, Laura Ashley, Next, Hobbs and Argos are promoting discount deals
Desperate stores are slashing prices by up to 80 per cent in a high street bloodbath.
It is feared some big chains could even run out of cash.
Price tracking of 800,000 products by accountants Deloitte shows the average discount on sale items is already 44 per cent.
However, retail analysts still expect footfall at stores to be 4 per cent lower than last year.
Seven out of ten high street and online stores are expected by consultants PwC to be launching sales next week.
Department stores, fashion chains and even discount retailers like Primark have warned of tough trading conditions as stores slash prices to entice shoppers on to the high street
It may feel like Christmas on busy pavements but high street footfall is down four per cent
It is the ‘toughest retail market anyone has ever seen’, according to retail analyst Richard Hyman.
He added: ‘We don’t want to blame Brexit for too much. But the inescapable truth is that it is definitely having an impact.
‘Christmas 2018 will come very late, and fail to deliver the respite many in the industry need.
‘Most retailers will enter 2019 with less fat than needed to see them through the weakest trading period of the year. It’s going to be a bumpy ride.’
The dire trading conditions could herald more store closures and further damage to high streets.
Mike Ashley, the Sports Direct tycoon who bought House of Fraser out of administration, is making plans to close many of its outlets. He has also suggested that Debenhams cannot survive without an injection of cash.
Both department store chains are promising savings of up to 60 per cent. Their rival John Lewis has been dragged into the fray under its ‘Never Knowingly Undersold’ price promise.
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Other household names such as Gap, H&M, Laura Ashley, Next, Hobbs and Argos are promoting winter sales, mega deals and clearance stock.
Bon Marche issued a profits warning this week and Primark, a leader in cheap fast fashion, has warned of tough trading conditions.
Diane Wehrle, of retail experts Springboard, said: ‘There has been more discounting this year by retailers, Black Friday was not a success and there is low consumer confidence because of the maelstrom of Brexit.
‘A number of retailers will be really pinched in the new year. Fashion and department stores are particularly vulnerable.’
Deloitte said discounts ranged from less than two per cent to more than 80 per cent. It said the average figure would be around 52 per cent from Boxing Day.
Bricks and mortar retailers are now losing 40 per cent of festive non-food spending to online rivals.
The rest of the year the figure is only 20 per cent. Black Friday sales also bring forward spending, reducing Christmas crowds.
Consumer business partner at Deloitte, Jason Gordon, said an over-supply of unwanted stock, caused in part by the mild winter weather, has driven retailers to record levels of discounting.