Christmas comes early for shoppers

High street chains including Marks & Spencer, Hobbs and H&M are among the dozens of retailers that have launched targeted discounts and promotions to tempt consumers.

On Tuesday, department store Debenhams will launch a six-day Christmas Spectacular sale with discounts of up to 25 per cent in every department.

The move comes as chains struggle with subdued consumer spending. Analysts fear that hundreds of poorly-performing stores could close if shoppers fail to spend this Christmas.

Iain MacRitchie, the chairman of fashion chain Hobbs, said that there is more discounting on the high street now than there was a year ago. Compared with three years ago, the amount of money-off activity has increased almost five-fold, he said.

“There is no doubt that the amount of promotion we are going to see over Christmas will be far greater and earlier than has been evident for the last three or four years,” he said, adding that shoppers have become far “savvier” at hunting out bargains.

The chief executive of another high street fashion chain described trading as “volatile”.

“Discount offers and promotions on the high street appear to be higher and more prevalent than last year,” he said.

Meanwhile the head of third large retailer said that high street chains have benefited from colder weather this year compared to last year, meaning that more winter coats have sold well. He argued that there is “no more [sales] activity than usual”.

However he warned that customers are “much more discerning” then ever before: “It’s hard work. We are having to work much harder for the same money.”

Although trading is tough, economists expect high street sales to grow slightly over Christmas. Richard Perks, director of retail research at Mintel, expects sales in December to hit £39.4 billion, up from £38.3 billion last year.

However a higher proportion of this money than ever before will be spent over the internet, piling further pressure on traditional high street shops with no online presence.

Each household in the UK will spend an estimated £670 online in the last two months of 2012, up 15 per cent from £580 last year, forecasters at IMRG and Capgemini will say next week.

Experian, the data company, expects a record 100 million visits to UK retailers’ websites on so-called Cyber Monday, which falls on December 3. The previous record was last year’s Boxing Day, when retailers’ websites had 96.2 million visits.

The continued growth of online will heap pressure on traditional high street shops, who will be the “Christmas losers”, according to accountants BDO.

“Despite efforts to revive them, many conventional high streets in secondary locations will continue to suffer from a lack of [shopper] footfall and rising vacancy rates,” said Don Williams, national head of retail and wholesale at BDO.

Hobbs’ Mr MacRitchie said there is “absolutely no question” that some chains will go bust after Christmas.

On average, one in nine shops in Britain’s town centres currently stands empty. In some towns four in ten shops are vacant.

Professor Joshua Bamfield, director at the Centre for Retail Research, said that up to 1,000 shops could close if Christmas sales are worse than expected. So far this year 47 retail chains comprising 3,673 shops have closed. This is the highest figure since 2009, when 6,536 shops closed.

So far this year high-profile chains including Comet, JJB Sports, Clinton Cards and Game Group have gone into administration.

This week it emerged that hedge funds are betting hundreds of millions of pounds that there will be blood on the high street this Christmas. Britain’s retail stocks dominated a list of big ‘short’ positions in the City that was published for the first time.

‘Shorting’ is when hedge fund traders bet stock prices will fall by borrowing and then selling shares, hoping to later buy them back at a lower price and pocket the difference.

High street promotions

Marks & Spencer – 3 for 2 on Christmas gifts

River Island – Seasonal Offers, up to 30 per cent off

Hobbs - £75 off selected boots and coats

Debenhams – launches Christmas Spectacular sale on Tuesday 13 November for six days, with discounts of up to 25 per cent in every department

Boots – 3 for 2 on gifts

Sainsbury’s – selected toys and bikes up to half price

Asda – 2 for £20 on selected toys

Reiss – Mid-season sale 50 per cent off certain items

H&M – Up to 50 per cent off selected lines

Comet – stock liquidation sale after falling into administration