High street footfall is down as retailers pin hopes on discounts to buoy Christmas figures

Footfall on the UK’s high streets has seen its sharpest drop since the snow last December, according to the British Retail Consortium, another blow to the sector in the run up to Christmas as retailers look to heavy discounting to buoy sales.

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Footfall between August and September fell 2.3% compared with the same period last year, with both high street and out of town centres suffering. The struggle is expected to continue into December as consumers battle with shrinking household budgets.

The figures are in contrast to the upbeat figures posted by the Office of National Statistics (ONS) last week which reported a 0.7% rise in sales in October.

The BRC disputes the latest ONS figures and says that they paint an “overly positive picture” of the situation most retailers are facing.

Deloitte has predicted that the best outcome retailers can expect this year is flat sales, adding that there will be no retail growth until 2013.

Stephen Robertson, BRC director general, says: “To generate sales, retailers are offering lots of early promotions and running special events. Most people are determined to have their treats over Christmas if they possibly can. Retailers will be hoping the quiet quarter reflected in these figures is the result of households postponing their seasonal spending rather than cancelling it altogether.”

Retailers such as Comet, Amazon and Debenhams have all launched deep discount promotions designed to get consumers spending. Comet’s “Five Day Frenzy” sale offers up to 50% off selected products such as TVs and laptops.

Amazon is reviving its “Black Friday” deals week, including limited time “Lightning Deals” from today until 25 November. Last year, Amazon was criticised for offering deals such a albums from £1 that sold out within seconds and crashed the website. This year it will offer a progress bar that shows how many items are left available in the sale.

The discounts follow a similar five-day discount sale run by Debenhams last week to give slow Christmas sales a shot in the arm. The department store is also cutting the VAT on a range of beauty and cosmetic products from today (21 November) for seven days in a bid to give customers “a treat for kick starting your festive shopping early”.

Morrisons has also pledged to invest an additional £100m in promotions and savings this festive season.

Even John Lewis, which launched its TV ad campaign and a tactical press campaign highlighting its Top 100 Christmas gifts and its pledge to price match its rivals last week, has reported slower than usual sales at the start of the Christmas trading season.

Sales in the week to Saturday November 18 were down 3.2% on the same week last year to £85.2m but the department store says “Christmas shopping momentum is building” as sales increased 11% from the previous week.

John Lewis is bringing forward its annual January clearance sale to 24 December for online sales and 27 December in stores, and will continue to match competitors’ prices, even on sale items. The department store, however, says that while it expects pricing to be “competitive” on the high street in the run up to Christmas, there has not been “significantly more activity” than in previous years.

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