The high street is facing one of its most painful bouts of contraction since the second world war, but the fight for survival means retailers are offering some top bargains for shoppers and investors.
Habitat, the furniture chain, Homeform, owner of Moben Kitchens and Dolphin Bathrooms, and fashion chain Jane Norman have all gone into administration in the past few days. Thorntons, the chocolate maker, and Carpetright are also shutting stores due to tough trading conditions.
This came as the Office for National Statistics said last week that households have seen the biggest fall in disposable income for 30 years. Real incomes fell 2.7% in the year to the end of March.
To entice consumers to spend, retailers have started to discount sooner than ever. Marks & Spencer launched its summer sale last week, a fortnight early, and other big retailers are offering discounts of up to 75%.
Maureen Hinton at Verdict, the analyst, said: “This is shaping up to be a great summer for discounts. Those with money to spare will be able to snap up bargains.”
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Investors are also being urged to pick up retail stocks on the cheap. Richard Buxton at Schroders, the fund manager, said: “For the patient investor, there will be great opportunities on the high street. Stocks will be volatile in the short term but this is priced in.”
Find the best sales
Websites are increasingly allowing shoppers to see a list of the best high street and online sales at a glance. Moneysavingexpert.com has a catalogue of sales and top bargains, while homesandbargains.co.uk has a “where are the sales” tool.
Comet, the electrical chain that could be sold off by its French parent, Kesa, is offering up to £400 off white goods and TVs. The Whirlpool WWCR 9430 washing machine is now £330 — a £320 saving on the normal price of £650.
At clearance-comet.co.uk, the auction arm of the retailer, you can get end-of-line, refurbished or slightly damaged goods at big discounts. The site claims one user snapped up a Hotpoint freezer worth £200 for £1.
Last week, a Samsung 46-inch LED flat-screen TV, which would cost £949 in a Comet store, went for £585, a saving of almost 40%.
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Ikea, the furniture giant, is offering discounts of up to 75% instore and online until July 17. Deals include a Vallvik chest of six drawers, reduced to only £38 from £152.
Debenhams and House of Fraser have cut prices by up to 70% in their summer sales and John Lewis, M&S, Boden and Laura Ashley have discounts up to 50%.
You can get even more money off sale items by buying them through a cashback site, such as quidco.com or topcashback.co.uk. For example, shoppers can save up to 50% in the M&S sale then get up to 3% cashback on their purchases via Quidco.
Pick up liquidated stock at auction
Frank G Bowen holds auctions every fortnight from companies that have collapsed. It works with the Insolvency Service and bailiffs to clear unsold stock, equipment from closed-down offices and lost and stolen items reclaimed by the police.
Governmentauctionsuk.com allows you to see a list of auctions that are selling off goods seized by liquidators and bailiffs, and you can also bid for stolen goods that have not been claimed at bumblebeeauctions.co.uk, which is run by the police.
Buy ‘survivor’ retail stocks
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Graham Ashby at LV= Asset Management tips Ted Baker, the fashion retailer, which saw a 15.2% rise in revenues in the 19 weeks to June 11. He also likes Howdens, the kitchen manufacturer, which is trading on a price/earnings ratio (p/e) of 8.8 and could benefit from Habitat and Homeform’s exit.
“The demise of businesses such as Jane Norman and Homeform means a reduction in competition for those with better consumer offerings,” Ashby said.
M&S, which yields 4.9% and has a strong balance sheet, could be poised to do quite well, while Buxton tips Debenhams, which yields 4.7%.
Jonathan Jackson at Killik, the broker, likes Marston’s, the pub and brewery chain. “A pub stock would be my preferred way of playing the UK consumer story because people will still want a pint or two,” he said.
UBS has upgraded Marston’s and its rivals Greene King and JD Wetherspoon to “buys”, saying investor concerns about the consumer environment were “overdone”.
Protect your purchases
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Shoppers buying big-ticket items should pay with a credit card to protect themselves against a store going bust.
Section 75 of the Consumer Credit Act states that if you pay for an item worth between £100 and £30,000 on a credit card, the card company is “jointly and severally liable”. This means it is responsible with the store for providing the goods or services, so must provide a refund if something goes wrong. Even if you paid only the deposit on your credit card, you are covered for the full amount.
If you buy an item with a Visa or Mastercard debit card, and the retailer goes under, you may be able to cancel the payment using Chargeback, where you ask your card provider to try to recover the money you paid.