Retailers competing for customers in the last full trading week before Christmas are having a difficult time, according to the latest forecasts. The number of visitors is expected to fall this week by about 3%, as the buyers with little money in spending.
Springboard's forecast adds to the bleak picture of the industry in the important festive trading season as consumers are unsure what Brexit will mean for the economy, and that their finances this year will limit the purchase of gifts.
"We do not expect it to be a great week," said Diane Wehrle, Insights Director at Springboard. "Consumers are nervous about what could happen in the new year, especially in the context of Brexit. So people are not ready to splash around for Christmas and return.
"It's not because people spend online. they just do not give out, "she added. "We all face risks as fares and electricity bills are rising, and we all know that."
She said that rising wages have been of little consolation to consumers in recent months, who have invested in savings and have additionally been indebted during a prolonged period of inflationary wage increases since the 2008 crisis.
Retailers striving to attract customers in the last few days of shopping before Christmas are already offering huge discounts. After a terrible month in November, Sports Direct boss Mike Ashley described as "the worst in history, unbelievably bad".
"Nobody could have budgeted for that," Ashley City analysts said last week, when he presented the half-year results of sports retailers. "Retailers just can not stand this November. It will literally smash it to pieces. "
The expectation that the number of visitors will fall again in the week to Saturday, December 22, follows a terrible weekend for the main roads of Great Britain, which have stopped by the sinking temperatures and freezing rain. On Saturdays alone, visitor numbers in the main roads fell by an estimated 9% compared to the same period last year. Including shopping centers and retail parks, the decline has fallen by 8%.
Wehrle said much of Saturday's lost trade was unlikely to be fully recovered on the following days because people had other plans for those days or found alternative gifts, such as buying a concert ticket or one day.
However, Rachel Lund, head of Insights and Analytics at the British Retail Consortium, said that at this point in the festive shopping season, everything was still to play: "We've had a slow start to the Christmas season, but with changing technology and shopping habits, many consumers will give up their purchases until the last week before Christmas – historically most important for retailers."
Big high-street names like Primark, John Lewis and Superdry have all warned that trade has been difficult in recent weeks and more retailers are expected to follow suit. Budget fashion chain Bonmarche said last week that hopes for full-year earnings were dashed by "unprecedented" trading conditions in the UK's main roads.
To confirm the trend, Visa's latest British consumer index found that spending in November declined 0.7% year-on-year as people shied away from business. According to the report released on Monday, October saw a decline of 0.2%.
Retail spending fell 0.9% last month, while online spending slowed to 0.4% in November (2.6% in October).
The Visa report showed that the largest expenditure losses were in transport and communications, clothing and footwear as well as leisure and culture. The best sectors were hotels, restaurants and bars, followed by food and beverage retailers.
"Despite the temptation of Black Friday, consumer spending fell again in November, as in seven of the past eleven months," said Adolfo Laurenti, Visa economist.
"Although inflationary pressures have eased somewhat and wages and incomes have improved, consumer confidence has continued to deteriorate as Brexit continues to be insecure. The economic environment should remain difficult for retail at least in the short term. "
Part of the shift to lower spending is that consumers are looking for options that require less material, with plastic and over-packaged items increasingly being avoided, according to Tim Hunt, co-editor of Ethical Consumer.
He said, "We expect consumers to focus more on ethical purchasing decisions than ever before in response to the growing environmental concerns that have increased this year. Recently, consumers have been alerted to the negative effects of palm oil and looking for sustainable palm oil or palm oil free products. "
According to an Ethical Consumer report, spending on used clothing for environmental reasons increased by 22% in 2017, while spending on ethical food and drink increased 16%.