Spending frenzy leads to record sales in the shops

Bargain-hunters continued to defy predictions of an economic downturn yesterday as shops celebrated record seasonal takings.

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Bargain-hunters continued to defy predictions of an economic downturn yesterday as shops celebrated record seasonal takings.

Analysts said the first day of the winter sales attracted 10 per cent more shoppers than in 2000. There were strong sales in the troubled luxury goods market, including Rolex watches and diamond jewellery.

Meanwhile retailers reported spectacular Christmas trading. The supermarket group Asda claimed its "best ever" Christmas sales, with customer numbers up by an "extraordinary" 15 per cent and December takings up by more than 10 per cent.

In the 12 days before Christmas the chain, now part of the American retailing giant Wal-Mart, sold more than a million turkeys and more than 50 million mince pies.

Its rival Waitrose also reported record trade, with sales across all its 136 stores up by 9.3 per cent on last year in the seven days before Christmas.

Theo Fennell, a jeweller who counts Sir Elton John, Vinnie Jones and Victoria Beckham among his clients, said seasonal trade had been "encouraging".

The jewellery group Goldsmiths said sales in its 161 stores in the four weeks to Christmas Eve were almost 11 per cent higher than the same period last year, with the top end of the market doing particularly well.

Safeway, Marks & Spencer, John Lewis and Dixons all reported brisk trade.

In London, the department store Harvey Nichols said 2001 could be a record year, while Selfridges, the Oxford Street department store, also said business was booming.

The number of people attending the first day of the winter sales was up by 10.24 per cent on last year, according to research by the firm of retail analysts Footfall.

A spokeswoman for Marks & Spencer said the company had been "very, very busy in the run-up to Christmas; and extremely busy in the last couple of days".

The Woolworths group said it was too early to release figures but that there had been a "noticeable increase" in the numbers of customers and sales in December, particularly on Boxing Day. Kingfisher, which owns B&Q, said Christmas trade had been "healthy, with the most growth coming from power tool and Christmas decoration sales".

Debenhams would also give no figures but a spokesman said sales were as expected, adding: "We've been very busy".

The festive retail boom will boost hopes that Britain can escape the economic slowdown which has seen the world's three largest economies – the United States, Japan and Germany – slip into recession.

Consumer spending accounts for about two-thirds of the British economy and so is a reliable indicator of the nation's economic health.

But with households going into the red to fund their spending, some economists are concerned that consumers will cut back when their bills arrive in the new year, leading to a slowdown in the economy.

Two of the country's biggest shopping complexes, Bluewater in Kent and Lakeside in Essex, each estimated that 160,000 people came through their doors on the first day of the sales.

In Scotland, retailers reported a similar picture, with the Buchanan Galleries in Glasgow estimating between 130,000 and 150,000 customers throughout the day. A spokeswoman for the West Midlands' largest shopping complex, Merry Hill, in Dudley, said: "Fewer purchases are reported to have been made but the price per transaction is higher.

"We estimated that we would see a 5 to 10 per cent increase in sales but reports from the larger retailers say they are now in double figures, at 10 to 14 per cent."

Richard Hyman, chairman at the retail analyst Verdict, said shoppers were taking advantage of the low rate of interest, currently just 4 per cent.

"Interest rates are so much lower than they have been in modern times and this has a double effect," he said.

"First of all it puts more money into people's pockets because of low mortgage repayments. Secondly, as interest rates are so low, people are thinking, what's the point of putting money into a savings account?"

Malik Thahid, from the British Chambers of Commerce, said: "Consumer confidence in the United Kingdom is a very good sign because what manufacturers need is a global change. "If the UK shows it is bearing up well it may have an impact across the world."