Christmas comes early for shoppers

Christmas has come early for shoppers this year with more and more retailers cutting their prices during the economic downturn.

The pre-Budget announcement by Alistair Darling, chanceller, that VAT would be cut to 15 per cent from Monday was an early present for consumers, but it will not be this 2.5 per cent off goods that drives the market. The widespread discounts that are already happening on the high street are expected to breathe life into the ailing high street.

“It is difficult to see how the cut in VAT is going to encourage increased spending when the amount of money being saved by the consumer is likely to be so small,” said Daniel Lyons, Indirect Tax Partner at Deloitte. “Even on big-ticket items, it is questionable whether the level of savings would be high enough as to attract new purchases.”

Instead, savvy shoppers hoping to secure the ultimate bargain, should look around the high street and keep an eye out for promotional vouchers.

Last week Marks & Spencer cut prices by 20 per cent in its clothing and homewares departments in its biggest one-day promotion for four years. And retail giants Debenhams and Bhs have also discounted stock in recent weeks.

M&S spokeswoman Clare Wilkes said: ”M&S customers are telling us they are feeling the pinch more than ever and they need some support to help make Christmas extra special.” A further wave of price cuts is expected from Boxing Day onwards, with January sales slashing 50 per cent off many products immediately.

There are other ways for shoppers to maximise their funds over the festive period. But it requires commitment and tactical thinking, said Martin Lewis, founder of moneysavingexpert.com.

”This is the year of the targeted and tactical shopper. As well as promotional sales we are seeing a rash of big discount shopping vouchers,” he said. “First we saw all the restaurants offering two-for-one deals but now it is the turn of the retailers.”

Vouchers featured on his website, at www.moneysavingexpert.com/shoppingvouchers, include 30 per cent off at Gap, 40 per cent off at Threshers, 20 per cent off Shudoo, 20% off New Look, 10% off American Apparel and 20% off Woolworths.

Other online website that flag up vouchers include the website myukvouchercodes.com

And it is not just shops that are offering these bargains, restaurants are also keen to benefit from extra custom. Most of the current deals – which include half price at Zizzi, ASK pizza, Gourmet Burger Kitchen and Café Rouge which offer vouchers on the internet –only run until the last days of November. But it is is expected that further vouchers will be issued as December approaches.

Another way to save on Christmas purchases is with a cashback website. These act as a gateway to retailers’ websites, paying the user a percentage of what they spend. The value of the cashback varies, typically from two to ten per cent. But to claim you need to register and set up an account with the cashback site and use this as a starting point for all future shopping. Popular sites include cashbackkings.com, wepromiseto.co.uk and quidco.com.

But there are downsides to cashback websites. While some will send money to a bank account, not all pay hard cash. Some give the bonus only as a credit on a PayPal account or as gift vouchers and they will often retain the first £5 a year of your savings as a service charge. It can also take 60 to 90 days for spending through the site to be credited to your account.