Leading High Street stores set to report double-digit growth in sales

Spending spree in shops and on forecourts could rule out a further cut in rates
Click to follow
The Independent Online

Some of Britain's biggest retailers, led by Marks & Spencer and Next, are set to announce booming sales figures when the Christmas trading reporting season begins in earnest this week.

The buoyant state of the high street will be reinforced today when the British Retail Consortium reports a near doubling in sales growth in the run-up to Christmas from 3.4 per cent a year ago to between 6 and 7 per cent.

But clothing sales at both M&S and Next are expected to outperform the retail average. Retail experts expect M&S to report a 15 per cent increase in like-for-like clothing sales on the same period last year when it issues its trading statement next week. Christmas trading at Next, meanwhile, is thought to have been about 10 per cent up.

"I wouldn't be surprised if M&S was 10-15 per cent up but then they were down 10 per cent this time last year," one analyst said.

Other retailers due to produce Christmas trading statements include Peacock, Arcadia and the discount clothing retailer Matalan, which come out with figures later in the week.

Bonmarché, the venture capital-backed womenswear retailer which is in a similar sector of the market to Matalan, said yesterday that like-for-like sales in the seven weeks to 29 December were up by 4 per cent. Including new stores, overall sales across the 240 outlets of Bonmarché were up by 18 per cent.

Overall like-for-like sales at M&S are thought to be up by around 4 per cent with strong sales in its clothing business countering poorer performances elsewhere in the group. The food business is thought to be 4 per cent up on a like-for-like basis.

MFI, the furniture retailer, is also thought to have enjoyed a strong Christmas period though it does not give a trading update ahead of its full-year results at the end of February. Its like-for-like sales are thought to be up by 10 per cent on last year. It has been one of the beneficiaries of the "nesting" trend, which is seeing increasing consumer spending on the home.

Electronics Boutique, the computer games specialist should report one of the highest increases this week with an expected 30 per cent rise in underlying sales boosted by the success of the Playstation 2 consoles. One senior retail executive said this Christmas and the start to the winter sales had exceeded most retailers expectations. "I think everyone has had a good time and anyone coming in with 3 to 4 per cent (like-for-like sales increase) will be interpreted as doing pretty badly. You will see lots in the 6, 7 or 8 per cent range and anything above that will be good. M&S could do 15 to 16 per cent in clothing."

Arcadia, the fashion group which includes the Burton menswear and Top Shop chains, is also expected to announce strong sales growth as is New Look.

Boots may be at the bottom of the pile with some analysts pencilling a fall of 1 per cent in underlying sales. Moss Bros, the menswear retailer being stalked by retail entrepreneur Shami Ahmed, is also thought to have struggled.

One retailer said: "I think when we've had all the trading statements we will be looking at a year when we have seen price deflation again. The sales have been strong, but at what cost to margins?"

Sectors that have performed most strongly include DVDs, music and home-related areas. "DVDs have provided something of a windfall this year for many retailers," one senior executive said. However, there is some suggestion that the general retailers such as WH Smith and Woolworths may have lost out in this market to the supermarkets and specialist retailers such as HMV.