Nearly 45,000 retailers are in financial trouble this Christmas as rising inflation and the squeeze on household budgets are having an impact on high street spending. There has been a 22 percent increase in retailers facing ” significant financial distress”, according to a survey by the advisory company, Begbies Traynor.

The furniture chain Multiyork collapsed back in November, while collapsed food wholesaler Palmer and Harvey has forced over 3,000 employees into redundancy. Multiyork’s sister company Feather & Black collapsed earlier this month but was recently saved by Swedish furniture giant, Hilding Anders, when they bought 17 or their 20 branches.

According to the survey, high street stores have already started discounting heavily to encourage shoppers. Big brands such as H&M, House of Fraser, French Connections, Gap, and Debenhams are offering massive discounts of 50 and 60 percent off. While spending has risen by 31 percent, this was mainly found with online retailers, with a 12 percent increase on last year, according to separate research by Mastercard.

Julie Palmer, a retail expert at Begbies Traynor said she is concerned that the high street is simply not having the same effect on shoppers anymore, with consumers “savvier” than ever as they shop for the best deals.

Alpesh Paleja, a principal economist at CBI, agrees that trade conditions will continue to be rough on retailers. Ms Paleja expects wages to remain squeezed, and as a result, retailers will face these challenging conditions “a while longer”.