Ringing tills herald bumper season

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RETAILERS disappointed by dismal autumn takings are at last daring to hope for a bumper Christmas after an unexpected surge in demand in recent weeks.

As they prepare to open their doors for the most important trading week of the year, the cash tills are at last ringing, according to anecdotal evidence, with sales of clothing and electrical goods booming.

John Lewis, the only stores group to publish up-to-date sales information, is ecstatic about recent sales. Brian O'Callaghan, the normally reserved director of trading, described sales in the week to 9 December as "splendid".

Weekly sales in the department stores group surged through the pounds 50m barrier for the first time to reach a record pounds 52m - 12.7 per cent ahead of the same week last year and 5 per cent higher than the group's target. Figures from Waitrose, John Lewis's supermarkets arm, are up 12.3 per cent on a year ago.

Stores analyst Andy Hughes, of investment bank UBS, predicts that December retail sales will comfortably exceed last year's pounds 17.8bn. If the growth achieved in November carries through into this month, shops should see record spending of pounds 18.5bn.

Mr Hughes said: "Last year tax rates were going up; this year they're coming down. Last year we'd just seen two hikes in interest rates; this time there's just been an interest rate reduction. And the impact of the lottery falls out of the year-on-year growth picture. All these things should help."

Electrical sales have been particularly strong. Personal computers and accessories, mobile phones and white goods are all registering gains. Clothing is also doing well, boosted by the recent cold spell.

With Sunday opening more widespread, the opportunities to shop are wider than ever. The prospect of windfalls next year from maturing Tessa accounts and floating building societies may also encourage some savers to push the boat out.

Stanley Kalms, chairman of Dixons Group, the electrical chain, declined to quantify the level of recent sales, but did say: "Computers are very heavily the winners this season."

Most retailers remain tight-lipped in the Christmas run-up. The lightest hint can send share prices rocketing or plunging. Most prefer to make a trading statement early in the new year.

Alastair Eperon, corporate affairs director of Boots, said: "There's a fair chance it will be a pretty good Christmas. People are spending more cautiously than a few years back. But as ever at Christmas, people are prepared to spend money."

Extra sales would not necessarily boost the bottom line for all retailers, he warned. Shops were pricing very competitively and smaller independent retailers were still losing market share to the big multiples.

Some retailers are highly dependent on the season for sales and profits. Kingfisher-owned Woolworth, for example, whose weekly sales average pounds 27m, aims for sales of more than pounds 100m in the week before Christmas. Argos, W H Smith, Signet and the department stores are all vulnerable to a poor Christmas. They will take heart from John Lewis's experience.