Retailers suffer poorer sales than last year despite milder weather
HMV and Blacks Leisure 'on brink of administration'
2012 predicted to be third weakest year for retail in four decades
Last updated at 10:23 AM on 2nd January 2012
Fears are growing for imperilled high street chains after industry leaders warned that drastic discounting has failed to kickstart a recovery over Christmas.
Despite the mild weather, activity on Britain's high streets is expected to be lower than last year once inflation is taken into account.
The British Retail Consortium (BRC)'s monthly sales monitor, published on 10 January, will show that the total value of sales in the run-up to Christmas was barely more than in December 2010.
Prices slashed: Heavy discounting failed to save La Senza from entering administration - and more chains are expected to follow
If November's consumer price inflation of 4.8 per cent is removed from the sales figures, they show a fall in the amount of goods shifted.
Lingerie giant La Senza and retailer D2 Jeans both entered administration over the festive period, while 1,610 jobs were axed at footwear chain Barratts Priceless.
A BRC spokeswoman said: 'We are not very optimistic that growth will be significant, and if you include inflation it will almost certainly be down on last year.
'Last December was badly affected by the snow so there was even more reason to hope this December would look good by comparison. However, Christmas shopping started very late this year and there was a remarkably high level of discounting in advance of Christmas itself.'
Under scrutiny: Analysts fear HMV could enter administration within days if its Christmas trading results are poor
Toy and gift chain Hawkin's Bazaar was among the companies which toppled into administration last week, citing 'exceptionally challenging trading conditions'.
Anxiety among retailers was so acute that two-thirds began putting up sale signs 10 days before Christmas, according to PricewaterhouseCoopers.
Now forecasts suggest more familiar chains will be felled before the week is out, with outdoor clothing retailer Blacks Leisure expected to enter administration shortly.
Music and entertainment chain HMV is being closely watched by investors, who say it could collapse within days.
The retailer has debts of 160m, and has warned that tough trading conditions 'cast significant doubt on the group's ability to continue as a going concern in the future'.
Job losses: Administrators at Barratts Priceless made 1,610 staff redundant last Friday
Research firm Verdict has predicted that retail sales will grow by just 1.2 per cent in 2012, making it the third weakest retail year in four decades - beaten only by 2009 and 2011.
According to the Centre for Economics and Business Research, Britain can expect the economic blight afflicting the high street to be replicated across the economy as a whole.
In its top 10 predictions for 2012, the thinktank warned of a 'modest to severe' recession in the west, but said this could exclude America.
It also predicted that at least one country would leave the Euro by the end of the year, with Greece the favourite to depart.
Its called survival of the smartest, smart shops do not rip people off, they realise people now shop around and have wisened up to what other countries pay for the same goods, the ripoff stores have had their day!
- genee , bassingbourn, 02/1/2012 16:34
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