Deloitte found that online retailers and grocers performed the best, while homewares and electricals suffered most.
Deloitte UK head of retail Tarlok Teji said: “Christmas 2008 was by far the most challenging for retailers in many years. However, many people were intent on enjoying ‘Christmas as usual’ and Christmas did just about arrive for retail in the end. Aggressive and high-profile discounting attracted the bargain hunters. However, this will have had an impact on the bottom line.”
Richard Hyman, strategic retail adviser to Deloitte, forecast total retail sales could fall 3 per cent in 2009 as the recession kicks in.
Hyman said: “2009 is going to be a very uncomfortable year. While total retail spend could fall by around 3 per cent this doesn’t reveal the true extent of the problem facing some retailers. I believe the supermarket sector will continue to grow by around 3 per cent, leaving non-food retailers looking at negative growth of around 7 per cent.
“At the same time, we expect cost growth to continue at its present rate of around 5 per cent. In the current economic climate, it is not going to be easy to pass on these additional costs. Most will have to absorb the cost increase, hitting their bottom line. It is essential that retailers manage and reduce their costs as much as they can.”
Meanwhile, Experian's FootFall figures showed that more shoppers visited the high street last month than in January last year. Shopper numbers climbed 1.2 per cent this January, although footfall plummeted 24.1 per cent in December.
Although footfall rose in January, the report found that retailers were unlikely to have benefited because of the “exceptional” level of discounting in stores.