Small shops struggle as sales bring chain stores huge profits

INDEPENDENT retailers today told how they fear for the year ahead as they struggle to match the big discounts of major high street chains.

Small shopkeepers said they were braced for a bleak future and had been forced to close parts of their business after big falls in sales.

Their warnings came as larger competitors revealed record profits after putting on major Christmas sales in a bid to lure customers.

John Lewis sold £21.3million worth of goods on Saturday - a seven per cent increase on the same day last year with women's clothing and home furnishings among the best sellers.

Managing director Andy Street said: "This is a remarkable result at any time and particularly so in this challenging economic climate."

Waitrose posted its busiest ever shopping day on 23 December with sales of £34.4million. Total sales in the week up to Christmas rose by six per cent on last year, with turnover on the 27th up 36.9 per cent.

More than five million shoppers took to the streets on Boxing Day, an increase of 12.5 per cent on last year, according to market research group Experian.

But experts warned that smaller retailers faced tougher times ahead as the capital sinks into recession.

Laurence Payne, chairman of the London branch of the Federation of Small Businesses, said it was "crucial" for small shops to differentiate themselves to have any chance of survival.

Mr Payne said: "Our members are telling us that even if they are doing alright, there are empty shops appearing all around them."

One independent retailer, Natalie Farouz, who owns vintage shop Shock and Soul in Camden Passage, has been forced to close half her business. She said: "My takings are down by 25 per cent compared with last Christmas.

"It would help if they brought the rents down. If something doesn't give then I might lose everything."

Europe's largest second hand record shop, Beanos, in Croydon, is now closing after 32 years of trading.

David Lashmar, its managing director, says the business had been in trouble since internet music downloads took over but the economic downturn had been the tipping point.

Rosa Lamache, 34, manager of two family-run designer Diverse boutiques, in Upper Street, Islington, was forced into 30 per cent-off sale a week before Christmas for the first time in two decades. She said: "Our main competitors are Selfridges and Harvey Nichols. The real crisis is going to hit us next year. The doubling of the rent before the credit crunch was a huge blow."