Major retailers of the High Street are suffering a drop in shares today after the severe weather has prevented many from reaching the High Street for one of the busiest periods of the year.
Next and Marks and Spencer are seeing slips in stocks today, with Argos-owner Home Retail Group’s shares have fallen by 2.6%
Experts have warned that the Big Freeze could create problems for the UK economy.
David Greaves, director at insurers Royal Sun Alliance (RSA), said: “The cold snap we had in early December has already cost the economy in the region of £4.8bn, so the bad weather forecast for this week couldn’t come at a worse time for some businesses. The impact will be felt across the whole economy.”
Howard Archer, Global Insight Chief Economist has said there was now “a very real likelihood” that growth could slow.
Current forecasts for GDP suggest growth by 0.5% in the fourth quarter of 2010.
“The return of the snow and ice is a particularly serious body blow for retailers who would have been desperately hoping that the latest snow blast would not arrive until after the last Saturday before Christmas, especially as shopping was also disrupted in the first Saturday in December,” he said.
“The hit to retailers is compounded in that many are hoping for their sales to be lifted in the final days of 2010 by consumers looking to make purchases – particularly of big ticket items – ahead of January’s Value Added Tax rise from 17.5% to 20.0%.”
Synovate – retail research group has found that the footfall in retailers across the UK on Saturday was down by nearly a quarter compared with the same period in 2009.
Retailers are not the only industry with British Airways shares dropping by 1% after the airline cancelled all internal flights out of Heathrow.
PricewaterhouseCoopers(PwC) have sent out warnings of damage to reputation and competitiveness for businesses that fail to prepare for the disruptions and fail to communicate effectively with their consumers.
“Preparation is everything,” said PwC’s Martin Caddick, “Proactive communication enhances reputation, while poor communication will lose business.”