Gloom on the high street

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The Independent Online
THE CITY is bracing itself for a patchy and mostly disappointing set of retail statistics this week that will show flat high-street spending in the run-up to Christmas.

The British Retail Consortium, which represents 90 per cent of UK retailers, reports its December trading figures tomorrow. They are expected to show stagnant and sometimes falling sales in most sectors. The statistics will be further evidence that the economy is slowing and will contrast sharply with last year when sales finished the month up 4.8 per cent.

Women's clothing is ex-pected to have fared worst of all, despite last week's sparkling Christmas report from Next, which registered an unexpected 17 per cent sales rise. "The attraction of shopping for clothes as a leisure pursuit is not as popular as it used to be," said Nathan Cockrell, retail analyst with BT.Alex Brown.

Sales in mobile phones, computers, books, toys and CDs are expected to be higher than last year, though.

Virgin's Our Price and Megastore sales rose 2 per cent in the five-week period from the start of December to the start of January. "They are very pleased because they had been budgeting on a zero increase," said a Virgin spokes-man. Sales at the 71 Megastore and 222 Our Price outlets rose to pounds 118m from pounds 114m.

Analysts are expecting Kingfisher and Dixons to have registered higher sales when they join the raft of retailers also publishing their individual trading statements this week. "We expect them to report positively," said Mr Cockrell.

Another analyst said the market was expecting "lower single-digit growth with a particularly shining performance from mobile phones and computers". This week, Dixons is expecting to sell its millionth mobile phone on the Link network.

But despite respectable growth in sales from Dixons and Kingfisher, analysts say their share prices could still fall as their current valuations leave them exposed to a rush to sell shares while they are seen to be at a peak.

Other retail companies due to issue trading statements this week include Boots, the House of Fraser, JJB Sports, Storehouse, which owns BhS, and the jewellery chain Signet Group.