Brands including Boots, Argos, John Lewis and Next are set to slash prices further in a bid to win festive custom amid a flurry of downbeat Christmas trading updates and a slower rate of sales growth year on year.
After a slew of big names announced closures and restructuring – including Toys R Us, Coast, New Look and House of Fraser – high street stores are desperate to squeeze the maximum out of the last few shopping days in 2018, a year some have labelled an “annus horribilis” for retail.
But the impact of Boxing Day sales has been somewhat diluted by pre-Christmas discounting as well as Black Friday, which has grabbed much of the attention, especially for online shoppers.
Retail experts have warned of “discount fatigue” and said that further price cuts will hit companies already fragile profit margins. A number of store brands recently warned of poor pre-Christmas sales, with major chains reporting that trading had been below expectations, both on the high street and online.
According to a Centre for Retail Research study for VoucherCodes, today remains one of Scotland’s biggest shopping days with 1.5 million shoppers expected to spend £315m in shops and £88m online.
Leigh Sparks, professor of retail studies at Stirling University, said: “I think we will see a fair number of retailers engaging in Boxing Day sales. But how real they are and how much impact they will have on the businesses, I’m far less sure.
“One thing we’ve learned in the past few years is that Black Friday has distorted the market so entirely the consumers have changed the way they do things.”
He pointed to a recent profit warning from online-only fashion retailer Asos, which said that its 20 per cent discounting had not been sufficient to win sales from its rivals.
He said: “It is a sacrifice of profit and margin for the retailers. Boxing Day sales will be used to give a bit of a boost and get rid of merchandise that is hanging around, however, consumers’s attitudes have changed and while they might pick up the odd thing they want, it is not the same as in the past. There is almost a discount fatigue going on.”
A survey from market research firm Kantar TNS showed that two-thirds of consumers will be hitting the post-Christmas sales this year. Younger people are the most likely to shop the sales and plan to do so predominantly online, while experts expect bigger ticket items such as furniture to be most popular among bargain hunters.
A string of high street chains earlier this month warned that their Christmas sales figures are worse than expected.
Mike Ashley, the founder of Sports Direct, described the start of the Christmas period as “unbelievably bad”, while Primark recently warned investors that November sales had proved “challenging” for the firm.
Payment firm Visa also suggested there have been tough times for retailers when it said that spending in November was down for a second consecutive month, while footfall figures have also been downbeat on Scotland’s high streets.
The increase in popularity of Black Friday discounts in November, which now often last weeks rather than being confined to a single shopping weekend - has hit the traditional Boxing Day price cuts in the UK. A report out last week from Deloitte showed record levels of pre-Christmas discounting.
Ewan MacDonald-Russell, head of policy at the Scottish Retail Consortium, said: “Whilst Christmas will always be the focus for retailers, there is no doubting Boxing Day sales continue to be a key part of the shopping calendar.
“It provides an opportunity for retailers to clear ranges which were less popular with customers and consequently provide some great bargains for savvy shoppers.
“It’s also important to note that many consumers will look at very different purchases after Christmas, with furniture and home improvement more important after the Festive frenzy rather than before. Furthermore, Hogmanay will provide another opportunity for food retailers to encourage shoppers to get in the perfect ingredients to end 2018 in style.
“So even though the Christmas rush is over, there is plenty to keep shoppers coming into store in the last week of the year.”