January sales could be ‘damp squib’ due to supply crisis, experts warn

SHOPPERS could struggle to bag a bargain in the January sales as product shortages could mean retailers back out of the annual event. 

The post-Christmas period has traditionally been the biggest shopping season in the UK but consumers have been warned it could be a "damp squib" this year.

Consumers are often seen queuing up for bargains in the early hours of Boxing Day morning with discounts lasting well into the New Year. 

But many businesses including M&S and Morrisons have already warned they won’t be opening their doors on Boxing Day this year.

And there are fears that cost increases and supply chain issues mean retailers shun the January sales period altogether. 

Paul Martin, UK retail chief at accountants KPMG, said: “Rising costs continue to bite into margins and supply chain issues have impacted the availability of goods, leaving very little room for the mega-discounting events in previous January sales.” 

Households have been warned on shortages of everything from turkey to toys this Christmas as retailers struggle to get to grips with a supply chain crisis. 

Brexit, a shortage of lorry drivers, shipping delays and prices rises are all contributing to the problem. 

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Martin added: “The pandemic has put massive pressure on global supply chains and hugely inflated the price of importing goods to the UK.

“Retailers have had to think long and hard about exactly which products they put into the fewer, more expensive shipping containers they can get hold of, which are likely to clear the shelves at full price.”

Potential strike action by Tesco staff could lead to empty supermarket shelves, it is feared. 

Against such a bleak backdrop, some experts are warning that retailers will be reluctant to offer discounts as they need to maintain profits. 

The Bank of England could deal a further blow to confidence if it hikes interest rates this month as it is expected to. 

Figures from the British Retail Consortium (BRC) and KPMG show that sales were up 5 per cent in November, thanks to a Black Friday boost. 

Black Friday took place on November 26 this year, but many businesses started dropping prices weeks before the big annual shopping event. 

Helen Dickinson, chief executive of the BRC, said: “The American holiday has now become a month-long affair in the UK, with deals spread over a longer period than ever before.”

But that may mean stores have less excess stock to shift that usual after Christmas. 

Justin Modray of Candid Financial Advice said: "After a busy Black Friday, January sales could prove a damp squib if stock shortages and rising costs put the squeeze on retailers.

"There’ll undoubtedly still be some bargains to tempt us in, but maybe fewer than usual."

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