Consumer spending slowdown in run-up to Christmas

High street operators could be in for a tough ride this Christmas as a cocktail of gloomy economic factors dampens their spirits.

With research among the broader community of high street businesses predicting a consumer spending slow down, those poorly performing pubcos holding out for an improved pre-Christmas spend could find themselves disappointed.

The list of warning signs about the continuing viability of price-driven, wet-led high street operators is long.

Companies such as JD Wetherspoon, Regent, Laurel and Luminar have already been involved in an uphill struggle to survive, resulting in a catalogue of on-going sell-offs and off-record talks on potential deals.

Mark Jones, chief executive of Yates, said: "We are encouraged by the levels of Christmas bookings. However, we have seen evidence of people being very cautious about spending throughout October and November." He continued: "The real test of Christmas is to have some balance in January, which is when you can really be bitten, and I expect this will be tough."

The wider high street spending slowdown is clearly linked to a fall-off in consumer confidence in response to the current downturn in property prices.

These immediate trading problems are compounded by other trends including aggressive discounting on beer, wines and spirits in the off-trade coupled with consumers who are increasingly choosing to drink at home.

As for the broader outlook at board level, sliding property prices, uncertainty and subsequent fall in share values following the recently proposed smoking ban, and an impending government move towards banning upward-only rent reviews, all continue to take their toll.

Adrian Fawcett, Punch Tavern's chief operating officer, believed high street operators could find the going tougher because of the way Christmas falls this year. "People will be working right up to Christmas, which is a mixed blessing," he said.

"This means less good trading days before Christmas Day, and better trading afterwards for family orientated and food-led pubs because people typically spend more time with family."

Impetus enough, perhaps, to call time on price-cutting, volume-driven operations which offer little by way of added value or quality of experience in return.