January 7, 2013 12:01 am

Pre-Christmas discounts boost high street

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The stand-off between shoppers and retailers in the critical weeks before Christmas led to steady but not spectacular high street sales in December, according to BDO, the professional services firm.

Figures from BDO’s High Street Sales Tracker show that sales from stores open at least a year at midsized high street chains rose 1.9 per cent year on year in December.

While the High Street Sales Tracker, which analyses like-for-like spending at non-food retailers with annual sales of between £5m and £500m, did not point to a bumper end to the year, it was better than in the week to December 16, when sales fell 3.7 per cent year on year.

Don Williams head of retail at BDO, said: “Last year we saw several stores having to slash prices to levels that really hit their profits after getting caught with too much stock. This year there has been a clear focus on protecting margins.”

He added: “By building up to Christmas early in a planned and measured way there has been less knee-jerk discounting. At the same time consumers are continuing to feel the pinch of hard economic conditions and are being much more careful about when and where they spend their money.”

Last week two senior retailers – Lord Wolfson, chief executive of Next, and Andy Street, managing director of John Lewis – indicated that there had been less discounting on the high street in the run-up to Christmas than in 2011.

Non-fashion sales were the strongest in December, up 7.07 per cent, BDO said, helped by Christmas present buying, and demand for luxury goods once discounting did start.

Fashion sales were flat, held back by the wet weather in December, and strong figures from the year earlier period.

Non-store sales rose 30.9 per cent year on year, with shoppers becoming more comfortable with online purchasing, especially from the big name brands, as well as making use of growing WiFi and 4G coverage to pick up bargains while on the mobile.

“Mobile shopping channels are also becoming more sophisticated and clothes shoppers are now more comfortable with trading an in-store experience for a fast, convenient and hassle-free online shopping experience. When backed by a strong brand and outstanding customer service this is becoming an increasingly important addition to retailers revenue figures and we expect this trend to continue,” said Mr Williams.

This week will see a series of store groups, including Marks and Spencer and Debenhams report their sales over the crucial Christmas trading period.

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