Bargains galore as slowdown hits high street

Shoppers' hopes of a pre-Christmas bargain bonanza rose today after figures revealed the extent of the slowdown on the high street.

The number of people shopping in London fell last month with sales inching forward at their slowest rate for more than two years.

The sudden slowdown has already prompted chains such as Debenhams, Oasis and Topshop to start cutting prices.

Many other stores are sending out thousands of online vouchers to "friends and family" with discounts of up to 60 per cent.

Retailers are increasingly desperate to win back shoppers whose confidence has been shattered by the Northern Rock crisis, rising mortgage bills and falling house prices.

One senior City figure has said that up to a dozen retail chains will be bust by Christmas Eve.

The London Retail Consortium said sales were just 0.4 per cent better last month than in the same month last year. LRC director Kevin Hawkins said: "This is the worst result for London since October 2005 and does not bode well for the run-up to Christmas."

The number of people visiting the high street fell 0.5 per cent last month.

There were also fewer visitors from American and Japan as a result of the weakness of the dollar and yen against the pound.

European visitors are still thronging to the capital, however, as they enjoy the strength of the euro.

Mr Hawkins said: "Customer footfall was well down on last year and the widespread discounting by department stores, while boosting sales, seems to have had little their overall impact on the average performance. The recent reduction in interest rates has come not a moment too soon."

The Bank of England cut rates for the first time since August 2005 last week to 5.5 per cent in an effort to boost the ailing economy.

Helen Dickinson, head of retail at KPMG, said: "Many will be hoping that the recent interest rate cut will raise consumer cheer with a last-minute surge at the tills."

Stores including Moss Bros, Lillywhites owner Sports Direct and H Samuel and Ernest Jones jeweller Signet have already warned that this year's profits will not live up to earlier expectations.

Analysts at banking giant Citigroup have warned that one-time high street favourite Woolworths is facing a "dire" future.

Pubs group Regent Inns, owner of bar chains such as Walkabout, Jongleurs and Old Orleans, and restaurant empire Clapham House, home of Tootsies, Gourmet Burger Kitchen and The Bombay Bicycle Club, have also warned times are bleak. The West End received a boost this month, however, when traffic was banned from Oxford Street, Regent Street and Bond Street on 1 December.

A staggering £100 million was spent that day as up to a million people descended on London's premier shopping streets.

Retailers are hoping this is a sign of things to come.

Jace Tyrrell of the New West End Company, which represents traders in the three streets, said: "Footfall for November was down in the West End and retailers are briefing store staff that every shopper through the door counts this Christmas.

"Although there is national anxiety for the Christmas spend to start, it really did kick off in the West End last Saturday with over one million shoppers to the traffic-free event.

"This week has seen a healthy show of shopping bags and this is what retailers are looking for. We are still forecasting a solid Christmas with a spend of well over £1 billion."

CHRISTMAS DISCOUNTS AND OFFERS

Boots: up to 50 per cent off selected fragrance

H&M: 25 per cent off one item when you sign up to receive the store's newsletter

Gap: 30 per cent off clothes with voucher downloaded from internet

Debenhams: up to 60 per cent off selected shoes Thresher: 40 per cent off wine and champagne with voucher downloaded from internet

Borders: 25 per cent off with voucher downloaded from internet

WHSmith: up to 50 per cent off gifts, up to 30 per cent off DVDs, up to 50 per cent off books

• Homeowners' hopes of lower interest rates next year were hit today by growing fears of soaring inflation. Rising fuel and food costs saw the price of goods leaving factories jump 4.5 per cent in the year to November, the highest rise since 1991. Producer prices are an indicator of future inflation which Bank of England policymakers must keep pegged at two per cent. They may now find it harder to lower interest rates quickly, say experts.