Beleaguered retailers have reaped some benefit from the positioning of Christmas, with shopper numbers increasing 13.6% on Monday compared to the same day in 2007, but analysts are still predicting the worst festive season for many years.
Beleaguered retailers have reaped some benefit from the positioning of Christmas, with shopper numbers increasing 13.6% on Monday compared to the same day in 2007, but analysts are still predicting the worst festive season for many years.
Many retail stocks continued their sharp decline, with Marks & Spencer down 7.5p, or 3.4%, at 213.25p, Next off 18p at 1080p, and Debenhams closing at 23p, a fall of 1.5p.
Last year, Christmas Eve fell on a Monday, typically a quieter day on the high street as people travel to see relations or begin their celebrations.
Market researcher Experian said the footfall figures "signalled that shoppers were out in force buying last minute gifts and Christmas merchandise".
Although the numbers do not reveal how much shoppers are spending, they indicate that people are at least visiting stores. Last week footfall was down between 8% and 15% on 2007 levels.
"This strong performance follows seven weeks of negative performance, so this final rally by consumers will be welcome relief for most retailers, but not sufficient to save the season for some," Experian said.
Some retailers have already begun sales in an attempt to lure shoppers during the crucial Christmas period.
Zavvi, formerly Virgin Megastores, which is thought to be close to entering administration, has started its sale.
Clothing chains such as Principles have also begun discounting heavily, and Tesco has increased its discounts.
Kingfisher-owned B&Q, John Lewis and House of Fraser are starting January sales today.
The extent of price-cutting means that even if footfall and the number of transactions increases further before Christmas, it may not translate into improved sales.
Analyst Freddie George, of Seymour Pierce, said the apparent late surge will not change what has been a terrible period for retailers.
"Having spoken to most of the retailers ... it's official - this will be the worst Christmas for many years," he said.
He said that clothing sales will typically be down by 6% to 9% on a like-for-like basis over the Christmas period, with electricals off between 10% and 13%, and home products down more than 10%.
George added: "The weak sales trend and the intense discount activity will continue well beyond January 2009, and will lead to a further step down in 2009/10 profit forecasts. The retailers will also be impacted by a stronger dollar as well as pension and supplier credit concerns.
"More worrying, looking ahead, as in previous cycles, it will take time, in our view, for the retailers to rebuild profitability from these lower levels."
Nick Bubb at Pali International had a similar analysis for non-food retailers. "We've seen unprecedented levels of discounting, and after a brief flurry of hope from the last-minute panic buying we think things will get worse again and carry on through the bulk of 2009 in terms of like-for-like sales and also gross margins."
He said M&S and Home Retail Group, owner of Argos and Homebase, are likely to cut their dividend for next year.
The atmosphere on the high street was further depressed by the news that tea and coffee retailer Whittard of Chelsea yesterday entered administration and was sold to EPIC Private Equity.
