Tough Christmas For High Street Retailers

Retailers will admit this week that Christmas was one of the toughest for years as the British Retail Consortium (BRC) publishes its monthly sales snap-shot.

Only the last few hours of trading and a brisk start to the seasonal sales rescued December from a sharp decline on the previous Christmas. The BRC is expected to report a relatively modest decline of no more that 2 per cent.

It is the latest glum news for retailers. With Sainsbury’s and Dixons reporting this week, the picture is unlikely to brighten. Both companies’ chief executives have been managing expectations downwards during the last two months.

Only Burberry, reporting on Wednesday, is a reasonably certain bright spot. Luxury goods analysts said that although fashion has been tricky, the designer spin-offs such as watches, fragrance and accessories performed well.

The overall tone was set last week as several iconic retailers were forced by a warning from the Financial Services Authority to report poorer than expected trading – and therefore anticipated profits – days earlier than they had planned. M&S was the biggest, reporting like-for-like sales down 6 per cent in the third quarter, and fulfilling predictions that clearing stock would cost dear.