Traders launch price offensive to woo festive shoppers

London: With just a few shopping days left before Christmas, nervous store bosses are trying to claw back millions of pounds of sales lost to the recent blast of arctic weather that forced shoppers to stay at home.

To get the tills ringing Tesco and Argos are offering half-price deals on toys such as Buzz Lightyear dolls, while fashion chains French Connection, Hobbs and L.K. Bennett have slashed the price of party frocks and high heels to get hard-up fashionistas to spend. "The snow in the week before last murdered a lot of us," said the chief executive of one fashion group, who added that discounts were bigger than in previous years.

Last week's milder temperatures brought some respite ahead of what is potentially the biggest sales week of the year for retailers with well over £1 billion (Dh5.7 billion) expected to be rung up at the tills every day. Department store chain John Lewis said it had set a new sales record last week as takings surged to £121 million on the back of "pent-up demand".

David Barford, director of selling operations, said customers pulled out all the stops to get their hands on iPads, coffee machines and handbags. "Even in areas where snow has persisted we saw the determination of our customers to deliver a perfect Christmas for their friends and family," Barford said. John Lewis' "never knowingly undersold" pledge meant the retailer had to match special offers available at rivals such as Debenhams and Dixons.

Barford conceded that discounting "had undoubtedly played a part" in pulling in sales and he suspected it would be the group's high water mark this year. But he could not rule out another sales bonanza this week.

Rivals' promotions

The intense competition among retailers is also delivering festive cheer for hard-up parents as one of the major battle grounds is toys. Caution from shoppers as well as the intensity of rivals' promotions has forced The Entertainer, which is the UK's biggest independent toy chain, to bring forward its January sale and it is already offering 75 per cent off some toys.

"We have already cut the prices of a lot of the stuff that we would normally put in the January sale," said managing director Gary Grant, who complained that fewer shoppers had been visiting its stores. "Shoppers are being more cautious and there is very competitive pricing about."

Argos is offering 50 per cent off some toys while Tesco is offering "three for two" across its range, including favourites such as Lego, Barbie and Monopoly. "It all depends on the last few weeks but there is a possibility we could be down on last year," added Grant.

The latest data from analysts at Synovate, which counts shopper numbers, highlights the tough conditions faced by retailers. Tim Denison, director of retail intelligence, said UK shopper numbers were down four per cent on Saturday, compared with the same day last year.

The trend is more serious if the fortnight affected by the snow is examined, with UK numbers down 14.3 per cent year-on-year and 21.5 per cent in Scotland. "Retailers are acutely aware of the lack of consumer confidence," said Denison, who highlighted the trend for "spot" promotions online, which are posted on websites but designed to encourage store trips.

Howard Archer, chief economist at IHS Global Insight, said that a big concern for retailers is that more cold weather is forecast. "With Christmas falling on a Saturday, next weekend's trading is going to be of major importance," he said.

Supply chains

"The problem for retailers stems not just from the bad weather stopping people getting to the shops but in the disruption it causes to supply chains. Supply chains have been massively hit by the snow and ice this month, with many products being stuck at container ports for an extended period. More bad weather would increase the likelihood that some people may end up buying less Christmas presents due to time constraints."

Retailers are also putting more pressure on Christmas this year, worried sales will dry up in the new year as the VAT rise, and public sector cuts, kick in.

The combination is particularly deadly for retailers such as BQ and Homebase, selling big-ticket items such as bathrooms and kitchens.