Retailers desperate to clear £10bn worth of goods left unsold in big chill

By NEIL CRAVEN FOR THE MAIL ON SUNDAY and SARAH BRIDGE FOR THE MAIL ON SUNDAY
Updated:

Retailers whose stores and supply networks have been disrupted by the snow have been left with an estimated £10 billion of stock to begin trying to shift in today's sales.

Experts at accountancy and insolvency firm RSM Tenon said they expected deeper than planned discounting from today as retailers struggle to clear their shelves.

The next few days will be crucial for many retailers as they need to make way for new ranges, which have already been delivered.

Crucial days: Retailers are hoping to clear their stock during sales

Crucial days: Retailers are hoping to clear their stock during sales

The VAT increase on January 4 has added to the pressure because many experts believe that the appetite for more expensive goods will fade when the 20 per cent rate is introduced.

Tom MacLennan, a director at RSM Tenon, said: 'The main concern for retailers calling us is cash flow. Discounting for many had already started last week and shop owners will be aware they have only a week or two to clear stock and generate cash to pay bills.'

 

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MacLennan said the push may help to boost sales, but would further hit margins at any retailers already weakened by the weather.

The disruption has also affected online retailers as many deliveries failed to arrive in time and post-Christmas returns are expected to be high.

A record number of shops are expected to open today as supermarkets try to cash in. Tesco, which launched its online sale last Thursday in a bid to clear Christmas stock, will open 410 stores compared with ten three years ago.

Upmarket grocer Waitrose, which will not open today, has outperformed the market. It said like-forlike sales so far this month were more than six per cent up compared with last December.

Meanwhile, there have been calls from some quarters for a delay in the VAT increase to 20 per cent by a month to compensate for the bad weather. The British Beer and Pub Association, which represents the brewing and pubs industry, has written to the Minister for Pubs Bob Neill.

However, the British Retail Consortium said a late decision to delay the rise would be a counterproductive 'administrative nightmare'.

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