The Christmas period is upon us, and goods are flying off the shelves, but for some reason, the tills are not ringing as loudly as they should be.

Across the country, the five-finger discount is being used with such frequency that retailers are taking action into their own hands.

With concerns about the police response to shoplifting, many are now resorting to controversial facial recognition technology to catch culprits before they strike.

Sainsbury’s, Asda, Budgens and Sports Direct are among the high-street businesses that have signed up to Facewatch, a cloud-based facial recognition security system that scans faces as they enter a store. Those images are then compared to a database of known offenders and, if a match is found, an alert is set off to warn the business that a shoplifter has entered the premises.

It comes as official figures show shoplifting offences rose by 13% in the year to June, reaching almost 530,000 incidents. Figures reported in August showed more than 80% result in no charge.

At the same time, retailers are reporting more than 2,000 cases of violence or abuse against their staff every day. Faced with mounting losses and safety concerns, businesses say they are being forced to take security into their own hands because stretched police forces are only able to respond to a fraction of incidents.

At Ruxley Manor Garden Centre in south London, managing director James Evans said theft had become increasingly brazen and organised, with losses from shoplifting now accounting for around 1.5% of turnover. “That may sound small, but it represents a significant hit to the bottom line,” he said, pointing out that thousands of pounds’ worth of goods can be stolen in a single visit.

“We have had instances where the children get sent in to do it. They know that the parents will be waiting in the car park and they’ll know that there’s nothing that we can do to stop them.”

Staff members here have also had their fair share of run-ins with shoplifters. In one case, employees trying to stop a suspected shoplifter were nearly struck by an accomplice in a car. “This is no longer just about stock loss,” said James, “It is about the safety of our staff.”

However, the technology is not without its critics. Civil liberties groups have warned that the expansion of this type of technology is eroding our privacy.

Silkie Carlo, director of Big Brother Watch, called it “a very dangerous kind of privatised policing industry”.

“[It] really threatens fairness and justice for us all, because now it’s the case that just going to do your supermarket shopping, a company is quietly taking your very sensitive biometric data. That’s data that’s as sensitive as your passport, and [it’s] making a judgement about whether you’re a criminal or not.”

Silkie said the organisation was routinely receiving messages from people who said they had been mistakenly targeted. They include Rennea Nelson, who was wrongly flagged as a shoplifter at a B&M store after being mistakenly added to the facial recognition database. Nelson said she was threatened with police action and warned that her immigration status could be at risk.

“He said to me, if you don’t get out, I’m going to call the police. So at that point I turned around and I was like, are you speaking to me? Then he was like yes, yes, your face set off the alarm because you’re a thief… At that point, I was around six to seven months pregnant and I was having a high-risk pregnancy. I was already going through a lot of anxiety and, so him coming over and shouting at me, it was like really triggering me.”

The retailer later acknowledged the error and apologised, describing it as a rare case of human mistake.

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A spokesperson for B&M said: ‘This was a simple case of human error, and we sincerely apologise to Ms Nelson for any upset caused. Reported incidents like this are rare. Facewatch services are designed to operate strictly in compliance with UK GDPR and to help protect store colleagues from incidents of aggressive shoplifting.”

Nick Fisher, chief executive of Facewatch, said the backlash was disproportionate.

“Well, I think it’s designed to be quite alarmist, using language like ‘dystopian’, ‘orwellian’, ‘turning people into barcodes’,” he said.

“The inference of that is that we will identify people using biometric technology, hold and store their own, store their data. And that’s just, quite frankly, misleading. We only store and retain data of known repeat offenders, of which it’s been deemed to be proportionate and responsible to do so… I think in the world that we are currently operating in, as long as the technology is used and managed in a responsible, proportionate way, I can only see it being a force for good.”

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Yet, there is obviously widespread unease, if not anger, at the proliferation of this technology. Businesses are obviously alert to it, but the bottom line is calling.

The owner of the fashion brand LK Bennett is this weekend racing to find a saviour amid concerns that it could be heading for collapse for the second time in six years.

Sky News has learnt that the clothing chain, which was founded by Linda Bennett in 1990, is working with advisers at Alvarez & Marsal (A&M) on an accelerated sale process.

Industry sources said on Saturday that A&M had begun sounding out potential buyers and investors in the last few days.

At one stage, LK Bennett was among the most recognisable brands on the high street, expanding to 200 branded outlets in the UK and overseas markets including China, Russia and the US.

In its home market it now trades from just nine standalone stores, with a further 13 listed as concessions on its website.

It was unclear whether a sale of the loss-making brand was likely or whether LK Bennett’s existing backers might be prepared to inject more funding into the business.

Contingency plans for an insolvency are frequently drawn up by advisers drafted in to run accelerated sale processes.

The brand is owned by Byland UK, a company established in 2019 for the purpose of rescuing LK Bennett from a previous brush with insolvency.

Byland UK was formed by Rebecca Feng, who ran LK Bennett’s Chinese franchises.

At the time of that deal, Ms Feng said: “Under our plan, the business will continue to operate out of the UK, looking to maintain the long-standing and undoubted heritage of the brand.

“This will be achieved through a combination of working with quality British design, and the business’s existing supply chain.”

Accounts for LK Bennett Fashion for the period ended January 27, 2024 show the company made a post-tax loss of £3.5m on turnover of £42.1m.

The figures showed a steep loss in sales from £48.8m in 2023.

According to the accounts, LK Bennett paid a dividend of £229,000 “at the start of the year when performance was doing well”.

“Given the decline in revenue, the directors do not recommend the payment of any further dividends.”

Ms Bennett founded the eponymous chain by opening a store in Wimbledon, southwest London, in 1990, and promised to “bring a bit of Bond Street to the high street”.

Her eye for design earned her the nickname ‘queen of the kitten heel’ and saw her products worn by the Princess of Wales and Theresa May, the former prime minister.

In 2008, Ms Bennett sold the business for an estimated £100m to a consortium led by the private equity firm Phoenix Equity Partners.

She retained a stake, and then bought back the remaining equity in 2017.

The company’s administration in 2019 resulted in the closure of 15 stores.

It was unclear how many people are now employed by LK Bennett.

LK Bennett has been contacted for comment, while A&M declined to comment.

Black Friday sales do not appear to have provided much cheer for retailers amid continued consumer caution, according to official figures.

The Office for National Statistics (ONS) reported a 0.1% decline in sales volumes during November, compared to the previous month, when the data is adjusted for seasonal effects due to the pre-Christmas shopping bonanza falling in December last year.

Economists polled by the Reuters news agency had expected growth of 0.4%. The dip was worse when the effects of fuel sales were excluded.

Rolling three-month data showed positive sales volumes were only propped up by strength in September.

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ONS senior statistician Hannah Finselbach said: “Retail continued to grow in the three months to November, helped by a strong performance from clothing and tech shops.

“This year November’s Black Friday discounts did not boost sales as much as in some recent years, meaning that once we adjust for usual seasonality, our headline figures fell a little on the month.

“Meanwhile, our separate household survey showed that although some people said they were planning to do more shopping… this Black Friday than last, almost twice as many said they were planning to do less.”

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The data was released against a backdrop of widespread consumer and business caution in the run-up to the budget on 26 November – held just two days before Black Friday – although promotional activity was already well underway before Rachel Reeves’s speech.

That period was dominated by on-off signals over income tax hikes and black holes in the public finances, but the budget itself largely backdated many of the most painful measures towards the end of the parliament.

While the ONS data does little to boost retailers’ expectations for the Christmas season, there was a crumb of comfort to take from a closely-watched survey released just beforehand.

GfK’s consumer confidence index nudged up to its joint-highest level this year – though it remained deep in negative territory.

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The biggest upwards contribution came from a willingness to make major purchases, despite perceptions for personal finances weighing amid continuing cost-of-living pressures in the economy.

Neil Bellamy, GfK’s consumer insights director, said: “Consumers resemble a family on a festive winter hike, crossing a boggy field – plodding along stoically, getting stuck in the mud and hoping that easier conditions are not far off.”

We have had better economic news since the survey was completed.

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Has the Bank of England really vanquished inflation?

It was revealed this week that a much larger decline in the rate of inflation, to 3.2% from 3.6%, had allowed the Bank of England to cut interest rates to 3.75%.

It promises a boost to spending power as borrowing costs come down further, with wage growth still rising above that pace for price growth.

It is now hoped that the end of the budget circus will spark some life into the economy following two consecutive monthly contractions for output and a surge in the unemployment rate.

Much of the increase has been attributed to the retail and hospitality sectors reacting to sharp rises in employment costs under the Labour government.

Consumer spending accounts for around 60% of the UK economy.

Richard Carter, head of fixed interest research at Quilter Cheviot, said of the outlook: “Markets do not believe growth is coming to the UK anytime soon.

“Indeed, the UK is likely to slip into recession if the latest GDP figures are anything to go by, and there is little sign of positive momentum being generated.”