Margareta Pagano: Extend the festivities with retailing's AAAs

The shares of Asos, Argos and Apple could help soften the blow of Christmas spending for the canny investor

TK Maxx is now officially my favourite shop for Christmas shopping. How's this for the latest stash: a beautiful Osprey wallet, apple green and real leather, which cost £20. As far as you can tell it's the real deal, certainly smells real, and, if bought from Osprey direct online or from the shop, costs around £90.

Then there's a high-fashion black Moah fur-lined ski-jacket which was £49.99, the recommended retail price is £229, and men's socks from Calvin Klein at about £2 each – beats even a market stall.

Why would you shop anywhere else? How TK Maxx keeps its prices down is a mystery, and a story for another time. But I'm not the only one who is enjoying turning austerity into an art form. All the latest figures for Christmas shopping show most of the British public is either hunting bargains from the discounters such as the US giant or waiting for the high street retailers to crack.

The British Retail Consortium says sales in real-terms up until last week showed a like for like growth of just 0.4 per cent, and that footfall is down on a year ago. Part of the reason why sales are so slow, it says, is because there are three weekends still to go before the big day so people are spreading the pain. But retailers are still hoping for a late minute rush.

After George Osborne's Autumn Statement last week, which will squeeze spending even further, a late rally is doubtful. From what I hear and see on the streets, it's war out there between shoppers and retailers; with shoppers hanging on hoping the shops will start the sales before Christmas: who's going to give in first?

But the big question for retailers – apart from the wonderful John Lewis – is whether sales will be up in real terms. In cash terms, some £38bn was spent last December – an eighth of the whole year's spending – although only a third of that is down to Christmas. Online shopping is still rising – it's now 10 per cent of all buying – and a recent survey showed that nearly half of UK shoppers have bought Christmas gifts online.

So which are the retailers will benefit from how we shop today? Here are three companies – let's call them the triple As – which look interesting to invest in with the spare money saved by sharper shopping. They are Asos, the online fashion retailer, Argos, part of Home Retail then, as a backstop, Apple; which last week saw its shares crash to below 2008 levels and briefly below its $500bn price tag. By Friday, shares – which were $700 in September – had crept up a little to $551.

Shares in Asos look pricey at 2463p but could still have far to go as it's quickly turning out to be the Amazon of fashion. Overseas sales are now 60 per cent of its total sales: and its moving swiftly into the US and Australia and across Europe. As Amazon and eBay have shown, these classy internet brands have no borders.

Argos is another one to watch as it sheds those awful catalogues to push three-quarters of orders online and double sales of own brands to get margins up. Home Retail's shares have already shot up to 121p on the new strategy, but Merrill Lynch reckons they could double.

And then there is the mighty Apple; one with $120bn cash at its core. It always does well at Christmas and its new iPhone, iPad4 and iPad Mini have all been launched with the season in mind – in the US on Black Friday shoppers were buying an average of 11 iPads an hour.

But its shares have been falling like a stone and now trade at a 20 per cent discount to its tech peers on the S&P500. That can't be right. Definitely time for some more canny shopping.

Starbucks' £20m does not allay bitter taste of UK tax regime

Let's get this straight: tax is not a moral issue. Even John Maynard Keynes, hero of the big-spenders out there, once remarked: "The avoidance of taxes is the only intellectual pursuit that carries any reward."

It's also why this pious cant about the immorality of multi-national companies such as Starbucks and Amazon who do not pay their fair share of corporation tax completely misses the point about how the UK should be running its tax affairs.

And it's this piety – mainly from the tub-thumping politicians – which has led to the ludicrous decision by Starbucks to pay a £20m voluntary lump sum to Her Majesty's Revenue and Customs in "blood money". By offering the payment, the US coffee chain has, de facto, admitted it's guilt and that it hasn't paid what might have been due in tax over the past 14 years. That's a terrible admission to make.

Yet until now Starbucks has been adamant that it has stuck to the letter of the UK tax law; that it has not paid corporation tax because under our system it was able to make deductions for royalties through its Amsterdam office and other avoidance mechanisms such as inter-company loans and on coffee purchases.

So, by offering this money is Starbucks now saying that it was wrong before? Or is it really saying that the UK's tax policy is a joke? It must be one or the other.

Even the fair tax campaigners, like UK Uncut, have seen through this payment as a PR stunt; one that has magnificently backfired despite bringing in expensive PR experts from Finsbury. What Starbucks should have done if it wanted to sweeten the public was to have offered the money either to a charity or even increased the hourly rate of its workers. With a nice flourish, it could then have said it will review its tax affairs for future years.

The much bigger lesson from all this is that the Treasury and HMRC need to work out how to reform our horribly complex tax system so that it doesn't favour overseas companies; we need a simpler, flatter, fairer code which is transparent. That's probably too hard; so much easier to spew cant.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Travel
travelWhy Japan's love hotels are thriving through an economic downturn
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week