Cold wave freezes Christmas salesTuesday, 21 December 2010
Saturday before Christmas day, also known as ‘Super Saturday’, is traditionally the day when British shoppers dedicate to finish their Christmas presents list. But this year, this custom has been severely damaged by the freezing weather. According to the Daily Mail, up to 10million shoppers were expected to hit the malls and high streets as stores launched their sales early to make up for business lost in the big freeze.
The arctic weather is estimated to have cost retailers in the UK up to £750m in lost sales as new figures show the number of shoppers who ventured out at the weekend was down 20% on last year, with Wales and London hardest hit. "The snow has really put the boot in to retailers," said Tim Denison, director of retail intelligence at Synovate.
John Lewis admitted a £5 million loss in revenue last Saturday due to the weather, with sales down by 10 per cent and two of its stores closed. Retail footfall on Saturday was down by a full quarter on 2009, with the worst affected regions the West Midlands and the South East, each accounting for a 30 per cent drop.
Also women swear retail group Alexon has revealed a £1.5 million hit to profits after the extreme weather closed stores and put off older shoppers. The owner of brands including Ann Harvey, Dash and Kaliko said the winter freeze saw like-for-like sales plummet 19.9% in the three weeks to December 18. Luton-based Alexon, which also owns Minuet, added that the weather was having a disproportionate effect on the group as it largely serves the older market. Between 40 and 60 of its outlets - including concessions in retail stores - closed due to the snow in each of the last three weeks, although online sales jumped 129% in the period to mitigate some of the high street pressure.
Richard Hyman, retail adviser at the accountants Deloitte, said the bad weather ‘is not doing the retail trade any favours at all in what was already a very difficult and challenging period’.
In the same vein, the insurer Royal Sun Alliance is estimated the big freeze’s daily cost to the economy in the region of £1 billion, most of which is hitting hardest on retailers, bars, restaurants and entertainment venues. IHS Global Insight’s chief economist Howard Archer suggests many in these sectors may need to consider working through the holiday period to make up for lost turnover. Retailers, however, seem to feel shoppers who were expected to flock to the sales immediately post-Christmas to beat the VAT increase may just not bother. According to Mr Archer, consumers may have decided fewer festive treats and presents are the way to go, encouraged by the continuing bad weather and the threat of sky-high heating bills.