Retail turnover was likely to climb more than 10 per cent compared to its January 1996 level, the Centre for Economic and Business Research predicted. This would take non-food sales to pounds 6.4bn next month, a record for a January.
The early indications on the high streets yesterday suggested that hopes of a bumper sales season were well-founded. Shopping centres and department stores reported that shoppers were out in greater numbers despite the snow.
Wilf Geldart, marketing manager of Sheffield's Meadowhall shopping centre, said there were queues at the doors before it opened. "There's definitely more confidence around this year and the sales have been heavily advertised," he said.
About 140,000 people were expected yesterday at the Tyneside MetroCentre. The 10-year-old complex's previous record was broken on Monday when 158,000 poured through the doors. This included 70,000 people travelling from Norway and a record number from Iceland, who spent an average of pounds 1,500 per head.
The National Westminster bank said that a massive pounds 72.5m was withdrawn from its cash machines on Christmas Eve, a third up on last year's record day. It processed 2.7 million credit and debit card authorisations as well, two-fifths up on last year's seasonal peak.
Between 1 and 24 December pounds 855m was withdrawn from NatWest - up 11.4 per cent on the same period last year. On Christmas Day more than pounds 5m was withdrawn, double the amount taken out last year.
The CEBR, an economics consultancy, said rising incomes, higher bonuses and a fall in the number of redundancies meant sales growth in the year to January would return to a nine-year high. "People have both the means and the confidence to spend," said Mark Pragnell, author of the report. He predicted that the momentum of consumer spending would continue beyond January.
The report also predicted that price discounts in the sales would be lower than in previous years because unwanted stock levels were low.
"Although pre-Christmas sales have not been the runaway success some predicted, it is likely that stores will have lower levels of unsold stock in January 1997 than in January 1996 or 1995," said Mr Pragnell. The report puts next month's average price fall at 1.2 per cent outside the food sector.
However, the report points out that the psychology of the late 1980s is still remote. There were four years of consecutive rapid growth in sales in the late 1980s, whereas this year will bring the first substantial gains in high street spending for seven years.