Surge in Xmas shoppers lifts hopes of high street recovery

Retailers' wishes for a bumper start to the crucial Christmas and new year trading period were granted yesterday as shoppers started queuing before daylight to pick up bargains.

Crowds braved snowfalls to line up outside the doors of Bluewater, the giant retail in park in Kent, at 3am. Up to 2,000 people were ready when Next, the clothing retailer, opened its doors at 5am for a sale that saw the prices of some goods slashed by 50 per cent.

The early rush continued the pattern set on Boxing Day when shopper numbers were up by almost one-fifth compared with the same day in 2004.

SPSL, the retail analysts firm, said visitor numbers to the UK's main centres were up 17.3 per cent on the same day last year as a greater number of stores launched their sales early or opened on Boxing Day for the first time.

FootFall, a rival agency, had an estimate of 17.4 per cent. "The quiet Christmas Eve seems to suggest that consumers treated Saturday and Sunday as rest days and the savvy shopper is now back out shopping with a vengeance," Natasha Burton, its marketing manager, said. "This has given retailers a welcome boost and has hopefully set the tone for a prosperous sales period."

A surge in retail sales will come as a boon for the retail sector and Government after the abrupt slowdown in consumer spending knocked corporate profits and overall economic growth.

Michael Taylor, an economist at Lombard Street Research, said: "Some of the data for Christmas retail sales is already encouraging and there are widespread reports of a boom in internet sales."

But Richard Hyman, the director of the retail analysts Verdict, said a surge in shopper numbers in the days between Christmas and the new year should be "treated with caution". He said: "What happens in the next few days is not going to compensate for the fact that 2005 has been the worst year for retail sales growth in modern times."

Verdict expects retail sales growth this year to be lower than last year and that much of the growth will be won at the expense of profit margins. "There's huge downward pressure on retail margins as we have negative price of inflation of 2 per cent but operating cost inflation or 4 or 5 per cent, and whatever happens in the next few days doesn't change that," Mr Hyman said.

On the positive side he said retailers had not made the mistake of 2004 when they went into the sales with vast volumes of stock that had to be written off after it went unsold.

Norman Black, a spokesman for Brent Cross shopping centre in north London, agreed, saying: "There are not huge amounts of stock. We have had a good Christmas so lots of stock has been sold off. Retailers are beginning to say they have finished their sales so if people are coming looking for a bargain they risk missing out unless they get here soon."

He said about 4,000 people queued for the opening of the John Lewis and Fenwick sales at 9am.

Charlie Mayfield, the managing director of John Lewis, the department store chain, said there had been clear signs of a pick-up in sales from the start of November. "Earlier in the year we started to see actual declines of 1 or 1.5 per cent per cent but from the beginning of November we started getting into positive territory and recent weeks have been up 8 or 9 per cent," he said.

John Lewis sales for December, up to Christmas Eve, were up by 11.7 per cent on last year and Mr Mayfield said early signs pointed to strong post-Christmas takings. "Demand for electronics such as MP3 players, computers and flat-panel televisions has been remarkable," he said. "Consumers want hi-tech and leading-edge technology."