Administrators have cut 450 jobs at Woolworths in order to try and keep the business running. These layoffs have been in support operations at the store at Marylebone Road in London, and the branch in Castleton, Rochdale.

The company, which employs over 25,000 people in its shops alone, and up to 5,000 others in related businesses, have not yet had to cut jobs in the shops themselves, or in their distribution centres, though this is expected after the Christmas period is over.

Since its collapse last month, administrators have launched Woolworths ‘biggest ever sale’, which some have criticised as looking more like a closing down sale, but administrators are claiming it was ‘ongoing’.

Prices are currently reduced throughout the store, with toys and greeting cards offering up to 50% discount in order to try to encourage shoppers into the store, and move stock before Christmas.

Administrators are saying that the shop will remain open until after Christmas. Neville Kahn of Deloitte said: “there is continuing interest in the core Woolworths business and the sale will continue whilst potential buyers finalise their plans for the purchase of the business.”  He added that extra staff had been hired in order to deal with the demand.

Nick Bubb, an analyst with stockbrokers from Pali International, has claimed that the company is trying to “get rid of unsold stock and empty shops…It looks a bit like a closing down sale.”

The famous high street store went into administration just over a week ago, on 26th November. Deloitte have taken over and are said to be in talks with numerous different companies that are interested in Woolworths assets.

However, just last Thursday, famous Dragon’s Den entrepreneur Theo Paphitis, pulled out of buying a share in the chain of stores.

It is still believed that supermarket chains, such as Tesco, Asda, Sainsbury’s, Co-op and Poundland are all interested in investing in some of Woolworths main stores.

The recent credit crunch has had an effect on lots of high street stores. Some other stores are trying to entice customers back into shops by sales before Christmas.

Debenhams, and Dorothy Perkins for example, have held a three-day 20% -off sale events that are soon to end.

Also Marks and Spencer has offered two sales in the last month, in what it claims to be an attempt to give shoppers “a helping hand in the run-up to Christmas.”

Prime Minister Gordon Brown has pledged that the government will work hard to ensure that struggling high street store, Woolworths, will remain open over the Christmas period.

He also told reporters that plans were being discussed so as to ensure that employees currently threatened with redundancy will be helped to find more work in the future.

This comes shortly after the most recent blow that the chain of stores has had to deal with recently, as lottery operator Camelot stopped selling tickets to stores.

Camelot declares its decision to suspend trading with Woolworths will become effective immediately, “pending the company finding a satisfactory resolution to its current trading difficulties.”

This means that Woolworths will no longer be selling National Lottery Tickets, scratchcards or process prize claims.

The chain will now be staying open until after Christmas, but there is still concern for the 30,000 employees that the chain currently employs.

The Prime Minister has said that: “the important thing is in the long-run that employees in this company – where the businesses and the shops are not going to stay open in the longer term – can get other jobs quickly.

“That’s why we’re going to move in immediately to give advice to employees in the company.”

Deloitte, the accountancy firm that has been appointed the administrator for the high street chain, has said that it is searching for a suitable buyer for the stores.

Dan Butters from the administrator said that: “In the last 24 hours, we have received expressions of interest from a number of parties for both the retail and wholesale businesses.”

The company did try to sell itself to restructuring firm Hilco, which would have taken the firms debt, but this deal fell through.

Deloitte has promised that though things are bad, it promises that employees will get paid.

Currently, Woolworths has 815 stores and four distribution centres, which employ around 25.000 people. It also owns Entertainment UK, which supplies DVDs to supermarkets across the country, and employs around 5,000 people.

2 Entertain is currently jointly owned by Woolworths and BBC Worldwide. Woolworths is currently trying to sell its 40% stake in this venture to BBC Worldwide.

Woolworths is just one of a few high street stores currently struggling, and analysts predict that worse is to come.

An analyst at Hargreaves Lansdown Stockbrokers has said: “the eye of the storm has moves in from the banks to the retailers.”

Other struggling stores include: MFI, who have also gone into administration.

Computer and Technology outlets, Currie, and PC World DSG International are blaming “tough and volatile” trading environments for their “29.8 million half year loss.

Kingfisher has also claimed that their profits at B&Q had fallen 9%.

Some fear that the ending of Woolworths could spark a price war if administrators try to cut prices in order to move the company’s stock, which could then lead to worse problems for smaller, weaker competing stores.

The Woolworths chain is currently struggling under its £385 million debt.

Its biggest problems started after having to pay cash for goods from suppliers, after trade credit insurers were no longer prepared to insure the suppliers to Woolworths.

Business group Deloitte has recorded that this Christmas people plan to fill their stockings a little less than usual as the average consumer plans to spend 7% less than last year.

The warning going out is that, this Christmas could be one of the toughest in decades for retailers, especially when compared to last year, where spending increased by 7%. This is according to Deloitte’s 14th annual Christmas Retail Survey, where 1,000 people across the country were interviewed.

The figures show that overall, 24% of customers in the UK plan to cut back and spend less this year on presents than they did last year. But it also showed that about 57% planned to spend about the same amount as 2007, and 19% expect to have to spend more.

The total average amount people predict they will be spending this year is £655. This is primarily on gifts, socialising and food and drink.

While the overall spending amount is set to fall by 7%, it is shown that the majority of this will be cut-backs in socialising – 12% less than last year.

More people are however, planning on buying some of their gifts at the supermarket, where the prices are competitively cheaper than the high street stores. 56% of people are planning on doing this, this year, compared with 52% last year.

Strategic advisor to the retail practice at Deloitte, Richard Hyman, has said: “I think the main headline is this is worst Christmas for a generation…But as a nation we’ll be spending £36 billion so it’s not a disaster.
“Broadly speaking, we believe sales will be flat this Christmas, with a slight fall possible.”

He added that retailers will be hoping that last week’s interest rate cuts will boost people’s disposable incomes.

Overall, 19% of adults have said that they plan to spend more this year, if you narrow the age gap to 16-24 year olds, 36% said they intend to spend more.

49% of 16-24 year olds said that they plan to have a good Christmas and “worry about the cost later”, a concerning amount.

Deloitte’s head of retail, Tarlok Teji, has said:” This age group has grown up in an affluent society with technology products and designer wear, are comfortable with debt, and have never been in a recession…Their high propensity to spend represents an opportunity for those retailers targeting younger customers.”