Somber forecast for post-Christmas on major streets hitting UK Omicron | Retail sector

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More than 35,000 British retailers and 20,000 bars and restaurants are facing major financial hardship, according to new data, while shoppers are expected to spend nearly a quarter more in physical stores on this Boxing Day than before the pandemic.

If fashion, footwear, furniture companies and other ‘non-essential’ retailers are allowed to stay open from 26 December, £3.94 billion is expected to be spent in stores and online on that day, 10% less than before the pandemic and 1% Less than last year.

Spending in physical stores alone is expected to decline 23% compared to 2019 as many shoppers avoid major streets, malls and retail parks amid fears of the coronavirus Omicron variant.

The outlook for the entire post-Christmas week isn’t any brighter, according to a report by GlobalData for Vouchercodes. A total of £13.9 billion is expected to be spent between 25 and 31 December, down 9% from 2019 and only 1% up in 2020 when many major streets were closed.

Online retailers will be the big winners, with more than £1 billion expected to be spent on Christmas Day alone as shoppers snap up bargains while digesting their festive meals.

Angus Drummond, a director at VoucherCodes, said fears of shutdowns had prompted shoppers to buy before Christmas rather than wait for discounts, a trend he said would “negatively impact Boxing Day sales performance.”

Meanwhile, data from insolvency firm Begbies Traynor revealed the precarious financial position of 55,000 retailers, pubs and restaurants across the UK amid low turnouts and cancellations during a key trading period.

The number is an improvement from the same quarter in 2020, but a 2% rise for retailers struggling financially versus the July-September period, as inflation and supply issues continue to emerge.

Julie Palmer, Partner at Begbies Traynor, said: “While many pubs, restaurants and hotels have thrived since the summer as the UK reopened… many now face the prospect of trading during what is usually the lightest part of the year compounded by a downturn in trade and very limited government support “.

Disappointing sales for the post-Christmas week are likely to put more pressure on businesses already battered by the pandemic and months of street lockdowns. Canceled holidays, parties, weddings and other events have also dampened sales of apparel, which accounts for a large portion of the retail market.

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City centers appear to have been hit hard by advice to work from home and stress about sharing public transportation. Data from retailer Springboard on Wednesday showed a 17.3% drop in turnout in central London compared to the same day last week, with regional cities reporting a 3.4% drop.

Deteriorating finances could lead to a flurry of business failures around the last quarterly rental day, Christmas Eve. Creditors often step in to secure their cash before the rent bill is paid at a time of the year when businesses are likely to be more cash-rich due to ceremonial spending. Officials are often not called until the New Year, since many lease contracts contain a “Santa Claus clause,” which gives an ultimatum to pay rent until after the Christmas holidays.

Retailers were not included in the government’s latest £1 billion rescue package, which focused support on hospitality and leisure companies. Hospitality companies say up to £6,000 in grants per port is not enough to make up for lost acquisitions.

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