RETAILERS are gearing up for one of the busiest Christmases on record as shoppers hold off making purchases in the hope that stores will slash prices further.
Two-thirds (66 per cent) of stores are running cut price sales, up three per cent on last week, with average price discounts of 39 per cent, according to research from PwC.
Randal Casson, PwC’s head of retail in Yorkshire, said: “Cyber Monday may have been one of the busiest days for online shopping, but most retailers are now realising that customers expect a consistent proposition, regardless of channel, and the stores have to enter into the festive discounting spirit in the same way as online.”
He added that retailers appear to be in “pretty good shape” for Christmas and apart from the “frenzied” Black Friday weekend, discounting is more subtle and not so overt as last year.
However this could all end next week if one of the store chains decides to slash prices and steal custom from rivals.
“Expect the unexpected next week – both in-store and online –as someone usually breaks ranks and ups the ante to spark a trading war,” he said. “Then the fight for the Christmas spending will really start.”
Black Friday, the day after Thanksgiving when retailers offer big discounts, has set consumers up for a month-long shopping spree and statistics out next week are expected to show that retail sales rose strongly in November and the first half of December.
ONS retail sales figures on Thursday are expected to show a healthy 4.5 per cent increase in November year on year.
Economist Howard Archer at IHS Global Insight said: “While consumers are always keen to take advantage of bargains, particularly in the run-up to Christmas, the desire for bargains has undoubtedly been heightened for many people by the extended squeeze on purchasing power coming from prolonged low earnings growth.”
The British Retail Consortium said that total retail sales values rose 2.2 per cent year on year in November, up from a gain of 1.4 per cent in October and a dip of 0.8 per cent in September.
Dr Archer said fears that shoppers would stop spending after Black Friday appear to be unfounded. “We expect the CBI’s distributive trades survey for December to indicate that retail sales have been very decent through the first half of December,” he said.
“While consumer confidence has come slightly off its recent peak levels, it has stabilised at an elevated level and it is markedly higher than a year ago. This is encouraging news for retailers and is also reassuring news for UK growth prospects.”
Mr Casson added: “Retailers are seeing steady and building activity, with no panic, and mostly optimism for this Christmas season.”