Retailers' fears mount as Christmas draws closer

Retailers are showing signs of panic amid growing concerns that the UK high street may turn out to be the child that Santa forgot.

In recent years, the Christmas rush has arrived later and later. Last year, an eleventh-hour surge in sales was met with a sigh of relief in retail boardrooms.

However, with six weeks to go, newspapers are now awash with ads for November Sales and promotions, as retailers ranging from Dixons to JJB Sport cut prices to tempt shoppers. In Wednesday's Daily Mail alone, adverts appeared for discount events at Bhs, Littlewoods and Debenhams.

One retail director said: 'There is a lot of pressure out there, particularly coming from supermarkets.'

Seymour Pierce analyst Richard Ratner said the real question mark was over home goods, rather than clothing, and rising consumer debt is a particular concern.

'Consumers have over-borrowed. Interest rate rises could mean crunch time is coming,' he said.

Big lenders Halifax and Abbey have raised lending rates by 0.25 per cent after a hike in the base rate to 3.75 per cent last week.

On Monday, the British Retail Consortium-KPMG Sales Monitor revealed October retail sales rose by a mere 0.8 per cent like for like compared with last year - the lowest level of growth since 1999.

BRC director general Bill Moyes said: 'It is strong evidence that the Government and the MPC should not press consumers too hard.'