High Street to unveil gloomy festive sales

Retailers are expected to deliver news of sluggish Christmas trading next week as analysts blasted Rachel Reeves’ ‘appalling’ Budget for exacerbating economic gloom that meant shoppers stayed away from high streets.

It came as experts warned of a ‘flurry’ of business closures as firms deprived of crucial income are forced to shut up shop.

Investors are keenly awaiting updates from some of Britain’s largest retailers that are expected to provide crucial insights.

Next will be the first major listed retailer to share how its Christmas went, in an update on Tuesday.

Lord Wolfson’s clothing retailer has a knack for defying gloom felt elsewhere – but experts have warned that fashion is an area customers will cut back on.

Greggs, Marks & Spencer and Tesco report on Thursday, followed by Sainsbury’s on Friday.

Clive Black, an analyst at broker Shore Capital, said the expectation was of a subdued performance, adding: ‘We sense it was a rather underwhelming fourth quarter.’

He put a large portion of the blame for the sluggish performance at the feet of the Chancellor. ‘Sad to say, the biggest factor depressing consumer confidence, and so the propensity to spend, has been the dire performance of Rachel Reeves and her appalling late 2025 Budget,’ he said.

Clothing and footwear retailers such as Next would be the ones to watch due to the ‘depressive effects of Reeves’ dulcet tones alongside sustained mild UK weather’ on demand, he said.

There were signs of hope for supermarkets last week when Lidl reported a record £1.1 billion in sales for the four weeks to Christmas Eve. But experts predict a bleaker picture for other retailers.

Greggs, whose shares crashed 40 per cent last year, has struggled with fewer customers and stubborn inflation. Its boss, Roisin Currie, warned last year its annual profits could fall as Brits are ‘saving rather than spending’.

The timing of the Chancellor’s spending plans – the day before Black Friday in November – is thought to have dented shopper confidence and weighed on sales.

Sainsbury’s boss, Simon Roberts, said before the Budget that customers were ‘concerned about the uncertainties out there’, with its Argos business expected to have been hit by economic unease.

It comes as warnings grow over the grim situation facing high streets, as businesses grapple with higher costs and depleted consumer confidence. Retailers also face higher business rates and labour costs from April, following changes unveiled by the Chancellor in November.

Alarm bells are ringing after it emerged that the number of general retailers in ‘critical’ financial distress as of December 15 had hit 1,947, 16.7 per cent higher than the same period in 2024.

Julie Palmer at insolvency specialists Begbies Traynor, who compiled the figures, said: ‘The fate of the High Street has been resting on the final weeks of the ‘golden quarter’ bringing a Christmas miracle. Collapsed consumer confidence is taking time to recover, and with shoppers spending less, there will be retailers feeling short-changed.’

Palmer warned that many smaller retailers will struggle with higher business rates and minimum wage rises, while the giants will weather cost hikes.

‘An unavoidable consequence will likely be a flurry of winter closures of shops already in financial distress that didn’t receive the gift of bumper sales they were hoping for over Christmas,’ she added.

Aside from updates on Christmas, investors will hope bosses clarify how they will be affected by changes to business rates. Many large retailers will actually see their bills go down from April while smaller firms will pay more.