‘Alarming’: Covid-hit retail industry fears loss of Boxing Day sales

Tougher coronavirus restrictions have dealt a fresh setback to struggling city centres, with Christmas shoppers staying away as doubts increase about whether the Boxing Day sales – the next big event in the retail calendar – will be allowed to go ahead.

The prime minister this week urged shoppers to “think carefully about avoiding crowds in the Boxing Day sales”. Billions of pounds are usually spent on what is one of the biggest shopping days of the year, although shops in Wales and Northern Ireland have already been told to close.

Diane Wehrle, the insights director at the research firm Springboard, which tracks shopper numbers, said the number of shoppers visiting UK stores and shopping centres was about a third less than this time last year, despite the proximity to Christmas.

The decline in central London, however, has been far greater, with numbers down nearly 70% on 2019 after the capital was placed in the toughest tier 3 restrictions. That compares with the decline of about 50% recorded by Springboard in regional cities.

“Central London has undoubtedly been harder hit than smaller towns and regional cities due to the reliance on public transport and loss of office workers,” said Wehrle. “It is clear that there has been an immediate impact on activity levels following the introduction of tier 3 restrictions.”

If the sales are allowed to go ahead, they may be disappointing for retailers anyway as families use their “freedom pass” to spend time together, rather than shop, Wehrle suggested. Some big high street names such as Marks & Spencer are closing this year anyway but rivals such as Next and Selfridges are still set to open.

“Footfall has been falling on Boxing Day for some time but it is going to be even harder hit this year because of the five-day pass that we have,” said Wehrle. “People are not going to be thinking about going out shopping so much.”

Stores in the West End are heavily reliant on local office workers and overseas tourists who are missing in large numbers. The high-end stores on key shopping thoroughfares such as Oxford Street usually rake in more than £2.5bn in November and December but this year that figure will be less than £900m.

Jace Tyrrell, the chief executive of the New West End Company, which represents 600 of the area’s retailer, said the weekends since stores reopened on 2 December had been stronger, with footfall “only 30% down”. It remained to be seen what Londoners’ appetite to shop would be on the last weekend before Christmas now that the city is tier 3.

The tough conditions mean worried retailers have already started to cut prices to shift unsold winter fashion and gifts. “Half the West End has probably gone into sale already,” said Tyrell. “There is a lot of stock to clear and I think the worry is we might not have Boxing Day.”

Harrods, which last year entertained queueing shoppers on Boxing Day with a Motown band, has abandoned its traditional hoopla. Instead the Knightsbridge store is already selling designer clothing and homeware at half-price.

The Watches of Switzerland chief executive, Brian Duffy, said shopper numbers had struggled to recover in London but the picture was better in other cities, such as Birmingham and Glasgow, where shoppers arrived by car. “The only bright spots we’ve seen have been the last two weekends,” he added. “I think there will be an even greater reluctance to go shopping [in London] with the increased alert level.”

The Treasury’s decision to end tax-free shopping on 31 December would also “whack” the West End, Duffy said, casting doubt on the future of some of the luxury stores trading in Regent Street and Bond Street. “This whole VAT thing is really alarming for London overall,” he said.

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