On the frontline: Blue Christmas for Britain's high streets

Cole Moreton goes in search of festive shoppers and finds empty malls, last-ditch sales and a distinct lack of goodwill as retailers desperately attempt to lure customers

This is the moment of truth for credit-crunch Britain. There are this morning, if forecasts are to be believed, just four economy-saving, cavalry-coming-over-the hill, belated binge-spending days until Christmas. VAT's come down; the shops have slashed their prices and started January sales earlier than ever before. "Half price" is the latest ticket to be glued to goods on the High Street. Many discounts reach 70 per cent. Hundreds of supermarkets are to open around the clock in the next few days. And, with thousands of jobs at stake, shopkeepers are putting all their faith in a last-ditch spending spree this weekend, traditionally the busiest of their year. They are hoping for £6bn to go through the tills before tonight. But will it work? Can the nation that tops Europe's credit-card league defy its debt, rise to the occasion and save the High Street?

At the moment when sales were supposed to reach their peak yesterday, the signs were not looking good. Footfall was down 7 per cent on last year, according to experts at Synovate Retail Performance, and despite brave efforts by retailers to talk up the sales, shop workers said they were shocked at how quiet things were. The credit-card company Visa Europe predicted that 12.15pm would be the busiest time for transactions, with 42,000 in a minute on their cards alone.

But at that very moment the shops were disturbingly quiet.

"This should be the busiest day of the year so far but it isn't," said Hannah Fudge, store manager at Dwell homewares at the Westfield centre in west London. Across the capital, Oxford Street, the spiritual home of British shopping, was far less busy than on a normal Saturday, let alone this special one. "I think we will see some last-minute sales as shops try to get rid of their stock," a spokesman for the New West End Company said. "We may even see early Boxing Day sales on Christmas Eve." He was hoping for half a million shoppers yesterday, many from Europe. "They are attracted by the fact the pound is almost at parity with the euro."

There were those who thought they could discern the first frosty shoots of a pre-Christmas rush. A spokesman for Capital Shopping Centres, which has interests in 14 regional shopping centres, including the MetroCentre in Newcastle upon Tyne and Lakeside in Essex, said: "With just five shopping days left to go, we are seeing an influx of guests to our centres." Not the sort of "it's total madness out there" enthusiasm we're normally used to, but a brave stab, matched by reports from Glasgow and Aberdeen that said business was "exceptionally busy". Manchester was looking quite perky, too. But from Coventry, and elsewhere, came grimmer tidings. Andy Talbot, manager at the West Orchard Shopping Centre, said he was "really disappointed" with the number of visitors yesterday.

"It's pretty bad to be honest. First thing this morning the team told me things were quite busy, but by 11.30 that had really started to die off. It's like a normal Saturday out of peak season, not a Christmas Saturday."

And, at Edinburgh's Gyle Shopping Centre, manager Andrew Cronie said it wasn't as busy as the fifth day before Christmas last year. However, they were 6 per cent up on last Saturday and 20 per cent up on the previous week. "People are leaving it later," he said, hopefully. "The real test will come on Monday and Tuesday when we are open late. It really boils down to next week."

On Oxford Street in central London, there was more than enough room to whirl around with arms outstretched like Maria in The Sound of Music, shouting for the British to rally round: "Come on you people, don't you know it's your national duty to shop?" Quietly, obviously. It was in response to a dare by Diana King, a lady in a fur hat who said she had come in on the Central Line, and who responded to questioning by accusing The Independent on Sunday of being one of the country's non-spending Fifth Column. "You haven't bought a thing," she said. True, but certainly not of the shoppers we met from Tokyo, Dubrovnik and Lagos, who all said they were glad of the falling pound.

In the war of nerves between bargain-hungry consumers, and a retail trade desperate to boost takings, it was the shops that blinked first. "All stock must go," said a sales banner at SportsWorld; 70 per cent off at Benetton; 50 per cent off at Aldo, Barratts, Jeans West, H&M, Dorothy Perkins, Gap... the list would go some way to filling this page. Game had a desperate handwritten sign saying: "This store is opening on Sunday... not just for browsing, but for buying." Outside SportsDirect, a man in a Santa hat with a megaphone was pleading: "Come on. Christmas. This way ladies, please. Christmas. Seventy per cent off, massive bargains. Christmas." His voice tailed off as shoppers ignored him. At the very moment shopping was meant to reach its peak, a young assistant was standing in the doorway of a shoe shop with her arms crossed, looking bored. Quiet, wasn't it? "Eh?" Were sales down? "You better ask the manager." He was grumpy. "You think I've got time to talk to you?" Yes, frankly. There was nobody else in the shop. "Yeah. OK. It's dead. Disaster. Now go away, you're putting people off."

The 189 bus passed, bearing a Harrods banner: "There is only one sale." Not this year. Mr Fayed may have missed a trick by not starting until after Boxing Day. Marks & Spencer had taken a third off all knitwear, lingerie and sleepwear. Many different stores will be opening as late as possible this week, more than 700 selling all night. Even the luxury shops are having sales, although they don't like to say so. Online discounts of up to 60 per cent are available at swish retailers such as Liberty, who are also using discreet events to attract customers. Still people are spending less: a poll last week found that the average for an adult is £59, nearly £35 less than a year ago. Retail analysts have put more than 300 names – including furniture and specialist stores – on a critical list, deemed in danger of going under. The administrators closed 111 MFI stores on Friday, and Woolworths will shut for ever unless a buyer is found by 5 January, leading to a loss of 30,000 jobs.

Back in west London, at the new Westfield shopping centre, the situation was much the same. "I was working in a different shopping centre last year and it was much busier at this time than it is now," said Andrew Brathwaite, 36, manager of the accessory shop Carpisa. "I have to admit I did expect it to be a lot busier in Westfield. I think people are holding out as long as possible." Far to the west of London, at the out-of-town retail park in Swindon, Alexa Plant, 24, was finding her shopping surprisingly easy. "We drove straight into a car-parking space, there were no queues at the tills and no queue at the cashpoint. I was prepared for hell, but it has been fine. There are reductions everywhere, but not really on things you'd want to buy."

So wasn't anyone doing well? Well yes, Poundland. They have plans for 35 new stores and 1,200 jobs. But the IoS understands that even the bargain-bin chain is about to launch a new Explosive Value range offering three for the price of two, buy one get one free, and up to 50 per cent off – all on items that are only £1 in the first place. The only queues on Oxford Street were for the perfume man, who had his own shop but still stood in the doorway hustling with a microphone like a market trader. People were queuing to get their hands on his unbelievable bargain of five fragrances for £20, including one called Posh, another named after Carrie from Sex and the City and a third with a picture of Lewis Hamilton on the box. "World champion. Formula One," said perfume man, giving the brave name of the scent. The eager buyers – mostly from abroad – didn't seem to notice that it was spelt "Curage". But however you spell it, after yesterday, courage is what the shopkeepers – and the rest of us – are going to need buckets of this Christmas.

After today there are still three shopping, economy-saving, days to go, but yesterday was supposed to be make or break. Maybe the long run-up to the great day, with many people starting their holidays on Friday, will see a great surge on Monday, Tuesday and Wednesday. And that is what this nation of shopkeepers, one-time spendaholics, and a nail-biting Prime Minister must now hope for.

Additional reporting by Emily Dugan, Rachel Shields, Richard Osley, Oliver Laughland, Suzanne Neuwirth and Sarah Simpson