Major commercial property retailers have decided that Christmas needs to come early as Britain’s high streets struggles to cope with the diminishing economy and collapsing demand from shoppers.
A decade ago, commercial property retailers would not start their festive promotions until late October, however this year sees a different approach-with many commercial property retailers on the brink of economic failure-advent calendars, selection packs and even mince pies and Christmas puddings are already on many supermarket shelves across the country. The UK’s largest commercial property retailer Tesco is telling consumers on their website to “prepare early for Christmas 2011”.
In the month of July, a full 151 days before 25 December, when most Britons were in sunglasses, desperately topping up their tans before the cold weather hits, Father Christmas opened the Christmas department in commercial property store Harrods, London’s most famous department store. This was the earliest that the store had ever begun its Christmas season.
It was the same picture for commercial property department store group Selfridges, on London’s Oxford Street, yet again this was the first time the department store had unveiled its customary Christmas-themed display on July 28, its earliest date ever. A spokeswoman said there was a 40 per cent rise in the number of international visitors in August; and the choice to open the display early was to capitalise on tourist visitors to London rather than overcome concerns about the state of consumer economy. The shop sold 2,000 Christmas baubles in the first seven days of opening the display.
Commercial property Marks and Spencer on Oxford Street, also has a dedicated aisle for Christmas products and promotions. Brian Payne, a 70-year-old retiree from Tottenham, north London, was stocking up on mince pies on Friday lunchtime. He said, “It’s amazing, isn’t it, that you can get all this Christmas stuff already.”They say ‘for Christmas’ on them, but if you look at the best-before date they only last till 2 October. I bought two boxes last week as well. I’ll probably go through 30 boxes before I have one on Christmas day.” Commercial properties Marks and Spencer are also launching its online Christmas hamper shop on October 4. The company said that this was the same date as last year.
Experts say that the downward spiral in the consumer economy could force commercial property chains to launch money-off sales over a month before Christmas in a bid to boost sales.
Simon Allport, a restructuring partner at commercial property Ernst & Young, the accountants, said “Our view is that shop windows will be red before December and the sales will come early. He went onto add: “Any retailers in trouble will see Christmas as a last chance saloon.
Some commercial property retailers have purposely sent out Christmas catalogues early to allow customers to manage their budgets better.
Samuel Barker of the Relationships Foundation, based in the UK said “I don’t blame shops for trying to get shoppers early in these tight times, and perhaps we need some Christmas cheer after a wet summer”. He further added, “But as UNICEF pointed out last week, gifts are no substitute for time with families, and people should not be fooled into thinking they are.”
Richard Hyman, strategic adviser of Deloitte, says commercial property retailers have had no other option but to move their festive ranges and promotions forward, because for many commercial property retailers, Christmas is the “only time they make any serious money”.
He further added “There is a very finite level of demand out there, so if the guy next door goes on promotion, other commercial property retailers will feel obliged to follow suit”.
Commercial property retailers want the Christmas season to start earlier in order to help fill their near-empty tills, while hard-pressed consumers want it to start later because they simply just don’t have the cash to spend, Hyman said. “This Christmas is going to be a massive challenge. Commercial property retailers are having a very tough time and the consumer economy is slowing down. It’s tough out there and it’s going to get tougher.”
Hyman expects there to be extra sales and promotions in the run-up to the big day this year. He said, “Consumers are on a diet of constant promotions and price cuts, and it is going to be quite hard to wean them off that diet.”
Hyman also warned that the tendency to hold Boxing Day-type sales before Christmas has made a rod for retailers’ backs, as many consumers are now holding back on buying seasonal purchases in anticipation of last-minute deals.
Hyman went onto say “Consumers know that if you leave it for longer you’ll probably get a better price. It encourages the consumer to leave shopping until as late as possible, as they know that retailers tend to start getting desperate as they’ve bought lots of stock for Christmas and they need to turn that stock into cash.”
David McCorquodale, retail partner at KPMG, also expects commercial property retailers to launch ‘surprise sales’ to tempt customers away from rivals. He stated, “Retailers are always trying something different. Last year House of Fraser picked random days in the run-up to Christmas to offer 50% off”.
Mr McCorquodale added, “Because of the snow last year, commercial property retailers lost a lot of sales and they will be trying even harder this year.” Last year’s severe weather has left retailers with warehouses full of unsold products they are desperately trying to offload.
He further added, “An awful lot of commercial property retailers don’t make a lot of profit most of the year. Many make up to 75% of their profits in the last three months of the year”.
However high street experts said that although Christmas will be far from easy, commercial property retailers have learnt from last year when they ordered too much stock and had to significantly cut prices in order to shift it.
Kate Calvert, a retail analyst at Seymour Pierce, said “Retailers will have ordered realistically after last year. They are being careful,” she said.
One shipping expert stated that some commercial property retailers are ordering up to 20 per cent less stock than last year to steer clear of having any products left over.
With household debt a major issue for many people, let alone the economy as a whole, shouldn’t the government, consumers and commercial property retailers work together to relieve, not increase, that pressure.
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