Shoppers still keeping a grip on the purse strings
Jan 6 2009 by Iain Laing, The Journal
SHOPPERS fought off the cold weather and economic gloom at the weekend to hit the high street in greater numbers than last year. Over Friday, Saturday and Sunday, the number of people out looking for bargains in the post-Christmas sales was up 2.7% on the same period in 2008.
The figures, compiled by Experian FootFall, showed that although shopper numbers were down 3.9% on Saturday and 5.2% on Sunday, they were up a bumper 14.4% on Friday.
Experian said the fact that New Year’s Day fell on a Thursday may have shifted the normal weekend shopping pattern, with many people taking Friday off work to hit the sales and keeping the weekend free.
While the high footfall will encourage retailers, it will not necessarily translate into greater revenue, with shops forced to slash prices to lure customers through the doors, Experian warned.
British Retail Consortium spokesman Richard Dodd said: “Our impression is that the initial flurry of spending that happened with the start of the post-Christmas sales is now fizzling out.
“Customers may have been persuaded to come out in large numbers but the picture is not rosy at all.
“While footfall is important, what actually matters is how much customers are spending and the extent to which retailers are having to discount to generate that spending.
“Conditions are very tough for retailers. Customers are short of spare money and nervous about spending what money they’ve got.”
A number of big high street names were unable to comment on their post-Christmas sales as they are due to make trading announcements in the coming week.
Marks & Spencer, which tried to tempt cash-strapped shoppers with 20% discount days in the run-up to Christmas and reductions of up to 50% in the Boxing Day sale period, will give a performance update on Wednesday.
The early sales could hit the company’s margins and some analysts are predicting like-for-like sales falls of between 5.5% and 9.6%.
If the trading figures fall by more than 6.3%, it would represent M&S’s worst performance since 1999.
Fashion chain Next has already braced investors for a difficult year – with high street sales down between 4% and 7% and a warning that the difficult conditions will continue throughout 2009.
The group – which reports figures today – is so far on track to meet profit targets but retail experts have warned that profits could plunge 30% in the final six months of its current financial year.
