Retailers fear sales are losing their value for shoppers

Retailers were heaving a sigh of relief after reporting one of their busiest Christmas Eve shopping sprees.

The late rush will go some way to making up for what has been a slow pre-Christmas period for many and will pave the way for a bumper sales period when stores reopen today.

FootFall, which measures visitor numbers at shopping centres, said crowds poured into the shops on the final shopping day before Christmas. It said numbers were only a fraction less than those in 2002's bumper festive shopping season.

David Smyth, marketing manager at FootFall, said: "The past three days have been manic from a retailing perspective. Consumers have been in control of the purchasing cycle and have left it to the last minute to do their Christmas shopping."

The British Retail Consortium (BRC) said it believed shoppers spent more than £1bn on Christmas Eve - the biggest figure for any day in December.

David Southwell, a spokesman for BRC, said: "It will be right down to the wire. The good news is that [this year] looks like being one of the best Christmas Eves for a very long time."

He said trade increased, as predicted, after many workers were paid at the end of last week.

Shopping centres have reported a brisk trade this week with Brent Cross, in north London, and Meadowhall, in Sheffield, predicting this year would outstrip even last year's bumper Christmas trading session.

Retailers are hoping the last-minute flurry of activity will offset a grim November where mild weather, the Rugby World Cup and President George Bush's visit to London led to a string of profits warnings.

But retail experts warned that the January sales were losing their value. Easy-available credit, the internet, and intense competition have led to low prices and cut-price offers.

According to Mr Southwell, high street prices have not increased for five years - and in many cases prices have been reduced - so that bargains were no longer a novelty.

"January sales are no longer so vital a part of the retail business as they once were," said Amanda Aldridge, the head of retail at the accountants KPMG.

"In the past five years there has been a huge improvement in supply chains, so there is a lot more just-in-time ordering and flexibility. Ten years ago if Christmas didn't go well stores would be left with a whole lot of stock on their hands in January. Now they are more canny and are unlikely to be over-stocked."

But it is not just better efficiency that is downgrading the new year sales bonanza. Year-round sales and prices cut by the internet are also responsible.

"Retailers boost sales at all times of the year by doing blue triangle days where everything is 25 per cent off for one day," Ms Aldridge said.

Mr Southwell added: "Everyday low prices have come to dominate. We have seen very little shop-price inflation over the past five years. It has moved away from that Victorian idea of two annual sales periods in the winter and summer and has become broken up.

"Credit has also had an impact. In the 1940s or 50s people saved up for things and very little was on credit. So if you wanted a washing machine you might have your eye on it all year, and camp out to buy it cheap in the January sales."

He also pointed out that much depended on the product and the retailer. Furnishings and carpet retailers have sales throughout the year to boost trading. And with electronic goods, prices are constantly falling.

A spokesman for the Dixons Group - which includes Currys, PC World and the Link - said that two years ago a DVD player cost more than £200 - now they can be bought for as little as £29.99. A digital box for television has fallen from £100 to £50 over the past year.

SAVINGS IN FASHION

The sheer quantity of goods suggests that even the most hassled sales-goer is more likely to return home with cheap garments this year.

Although the fashion chain New Look has cut last January's loss-leader promotion price, from £5 per item to £3, most retailers are discounting at a conservative 50 per cent.

For the brave and the organised there are rich pickings. The pre-Christmas doom will have contributed to a surfeit of stylish bargains.

Harrods, meanwhile, is relying on eye-catching loss-leaders to bolster its sale season image. There may only be a handful of £3,000 John Galliano frocks reduced to £200, but within the pall of doom currently stifling fashion retailing, the buzz that surrounds such extravagant discounts is very valuable indeed.

... AND IN GADGETS

The Apple iPod, the digital music player, will be the most sought-after gadget in the sales this year. With 1.79 sold every minute around the world, most shops had run out before Christmas. Margins are thin, so £249 for the smallest version is likely to stick. There are other digital music players around which can store more - but they are not as elegant or sought-after.

There are bound to be bargains on the Sony PS2 (about £140) and Microsoft Xbox. With newer models getting ever closer, now is a good time to take advantage of overstocked suppliers.

Flat-screen TVs have been the hit of the season. They are pricey but there are multiple suppliers. There is a good chance that prices will be slashed by at least £50 to get stock moving.