A dramatic drop in people visiting shops on the weekend before Christmas might not necessarily result in terrible trading updates from all retailers in January, though investors should not expect too many fireworks in the way of companies beating earnings estimates.

Many people adhered to warnings in October to shop early for Christmas and not get caught out by stock shortages at the last minute. That saw a lot of festive-related spending brought forward.

Retail sales were also upbeat in November, rising by 1.4% in the UK according to ONS data and driven by strong demand for clothing, toys, jewellery, and computer-related items.

The Omicron variant then hit the country and resulted in a volatile end to 2021. GFK’s latest data shows a decline in consumer confidence for December, which the research group also attributed to concerns over the rising cost of living. ‘Dispirited Brits say they are less inclined to make major purchases during the countdown to Christmas,’ it added.

Analysis group Springboard noted a decline in people visiting shops on the Sunday before Christmas, no doubt as individuals seek to avoid crowds for fear of getting Covid.

The Springboard figures showed that 25.2% fewer people visited UK retail destinations on 19 December, compared to 22 December 2019, the Sunday just before Christmas that year.

The number of people on high streets fell by 5.9% last Sunday but increased by 4.8% at retail parks week-on-week. Retail parks benefit from having larger stores and big car parks.

Theoretically, a company which benefited from the pull-forward on festive spending in October and November and which has stores in retail parks, and possibly an online service as well, might emerge relatively unscathed. B&M (BME) has lots of shops in retail parks, so does Dunelm (DNLM) which also sells online.

While some retailers might be able to cope with more volatile trading in the final days of the festive season, there is still the question of confidence for 2022. The stock market is forward looking so it is what management says about the months ahead which really matters for the share price. It seems highly unlikely that any retailer is going to be bullish about the near term.

First to report in the New Year will be Greggs and Next on 6 January, with the former vulnerable to weaker trading in the week before Christmas if high street footfall was down. B&M updates on 11 January followed two days later by Dunelm.

Sofa seller DFS (DFS) will be one to watch when it updates on 12 January given GFK’s comments about consumers being less willing to make a big-ticket purchase. On 13 January, the market will want to know if ASOS (ASC:AIM) has suffered the same fate as BooHoo (BOO:AIM) which last week said customers were sending back a lot more clothes.

Just remember that if a decent company with good long-term prospects sees its share price fall simply because of a few months’ bad trading, that’s a gift to investors who take a long-term view. The shares are put on sale, so you might want to get ready to bag a bargain next month in the retail sector.

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