Retail sales figures likely to dispel pre-Christmas gloom

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The Independent Online

Official retail figures out this week could bolster the high street before the peak Christmas trading period, economists believe.

Official retail figures out this week could bolster the high street before the peak Christmas trading period, economists believe.

Any monthly rise in retail sales would be hailed as evidence that some of the recent gloomy predictions for the festive season have been overblown.

The British Retail Consortium sought to dampen retailers' expectations last week when it said the high street had endured its worst month this year in October. Its director general, Kevin Hawkins, warned: "There is no escaping that the high street trading environment is tough in the run-up to Christmas."

But economists believe official figures could show monthly retail sales rose 0.5 per cent in October. With the exception of a weather-hit August, official retail sales figures have defied predictions of a slowdown after five interest rate rises. Retail sales rose an unexpectedly strong 1 per cent in September, according to the Office for National Statistics.

Philip Shaw, an economist at Investec Securities, said: "There is astoundingly strong evidence of a further - albeit smaller - rise this time." John Butler, at HSBC, said: "Official data has yet to show weakness despite market expectation there will be a fall-off."

Retailers are braced for a frenzy of last-minute shopping this year, because Christmas falls on a Saturday. That means there are only three shopping weekends in December. Shoppers will hope that by holding back they will force retailers to discount their stock so they can pick up some festive bargains.

People plan to spend less on presents this year than in 2003, a survey revealed yesterday. Christmas shoppers plan to spend an average of £423 - 5 per cent down on last year and little more than two-thirds of the £600 Britons expected to spend in 2001.

The research, by Abbey, spells bad news for children, with everyone over 35 planning to spend less. Those aged between 55 and 64 are planning to spend £344 on average, about one-quarter less than they splashed out last year. Only the 15 to 34 age bracket intend to spend more this year.

Of those intending to cut back, 39 per cent said they had made a conscious decision to cut back on the excesses of past Christmases, with 38 per cent admitting their current finances will not stretch to previous lavish gestures.

A separate survey yesterday showed that one in five Britons started saving for Christmas in August. Shoppers have saved an average of £40.73 to spend on presents during the past three months, research by Birmingham Midshires found.