A credit crunch Christmas

Walking down Preston’s high street you would be forgiven for thinking that we are in the middle of the January sales. Finding a shop that does not advertise discounts or offers in the window is a rare find. The recession has hit retailers hard over the past couple of months proving that this year is going to be the ultimate ‘credit crunch Christmas.’ With failing banks, poor interest rates, falling house prices, redundancies and mountains of debt, it is little wonder people are reluctant to part with their hard earned cash over the festive season.

Discounts are nothing new

Advertising sales and discounts before Christmas to encourage spending is not new for 2008. The 3 for 2 offers on Christmas gifts in Boots and Marks and Spencer are as part and parcel of the Christmas package as the nativity set. The difference this year is that people want more for their money and retailers have reacted by introducing lower priced goods normally reserved for the January sales.

British Homes Stores is no exception and is a typical example of what is currently on offer on the high street. In store competitions such as the chance to win a diamond worth £15,000 with every jewellery box purchased along with the chance to win £35,000 by purchasing Christmas crackers is a yearly event.


Bhs manager, Sharon Thompson, says that customers have always expected festive deals.

“Every year we have good offers but this year is the best yet. We have gifts for under £6 as well as reductions of up to half price. Our competitions are always popular and are reflected in the number of sales of crackers and jewellery boxes.”

Shaky Start

From October through to December retailers have reported disappointing sales figures prompting universal price cuts in shops. According to the British Retail Consortium sales fell by 2.6% compared to last year. A price reduction of 20% or more is common on the high street as well as hosting discount days and is a sure sign of desperation by retailers. The most popular of which was the two day 20% off clothing and Christmas goods event by Marks and Spencer.

Preston’s Marks and Spencer, Commercial Manager, Brett Mandell said

“Both days were a huge success and have boosted our sales considerably. I would’t be surprised if Marks and Spencer do something similar in the not too distant future.”

VAT

To encourage spending in shops the government cut VAT from 17.5% to 15% at the beginning of December. In reality this means a saving of £2.50 for every £100 spent which is hardly a big saving for shoppers.

Closing down sales

Unfortunately discounts, sales and VAT cuts haven’t saved some stores from going into administration. The Woolworths, Pier and MFI branches in Preston will close over the coming weeks. Fashion store MK One is disappearing as it has been bought out by Internationale.

Slight improvement

Thankfully in the past few weeks sales have improved. Consumers seem to have held back on spending in the hope of picking up bargains closer to Christmas. You only have to fight your way through the bag laden crowd on Fishergate on Saturday to realise that people are finally spending their money.

Map

Have a look at the map below showing what shops in Preston are offering at the moment. The blue pins show some of the best offers and discounts on offer. The red pins highlight stores which are not as good.

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