Clued-up shoppers force stores to start their 'new year' sales in early December

There was once a time when the New Year sales all started on 1 January. Now, however, fierce competition between retailers and fears of an economic slowdown mean that prices are being slashed at the height of the Christmas shopping crush.

There was once a time when the New Year sales all started on 1 January. Now, however, fierce competition between retailers and fears of an economic slowdown mean that prices are being slashed at the height of the Christmas shopping crush.

Shoppers are snapping up cut-price Christmas presents at a fraction of the cost they were just a few weeks ago as stores vie for the festive pound.

Examples include a digital camera from Dixons, reduced from £249 to £99 this week, and a DVD recorder at £399, compared to £549 last month. Other stores that have started pre-Christmas price promotions include Marks & Spencer, Tesco and Boots - although many retailers are avoiding the term "sales'' before Christmas, and are marketing the price cuts as one-day "spectaculars'' or three for the price of two deals instead.

Market analysts say that over the past few years consumers have left it later and later to start their Christmas shopping, and, in reaction, nervous retailers have moved their sales earlier and earlier.

Richard Hyman, chairman of the market research company Verdict, said: "This is the fourth year that prices have gone down. Presents will cost no more than they did 10 years ago because competition is so intense. It is stopping retailers from putting their prices up.''

Analysts talk of the "golden triangle'' months of November, December and January, when retailers traditionally see a huge boom in sales from Christmas shopping and new year bargain-hunting. Some companies make between 40 and 60 per cent of their turnover from these months alone.

David Southwell, of the British Retail Consortium, said: "The figures are obviously massive and the price is huge, so there is a lot of competition in the months before Christmas. "Even five years ago people used to start their Christmas shopping from the first weekend in November. But now, over the past two years, we have seen an increasing trend where people leave it to the last minute to buy their Christmas presents, often down to the last week before Christmas.''

Mr Southwell added: "Effectively it has meant that customers have won because they have forced shops into cutting their prices. I don't think it should be seen as a sign of economic problems - it is just very healthy and very fierce competition between retailers.''

British consumers spend £30bn each month in shops, but an extra £10bn is spent over Christmas, according to the British Retail Consortium.

Mr Southwell said: "Consumers have become increasingly canny and I think at this time of year customers sit back and wait to see what retailers will do to impress them.

''The retailers are not doing this as a knee-jerk reaction - they have been planning their strategies for months, and things like one-day spectaculars are something different to promote before the January sales.''

The latest retail figures for November are due out on Monday, and analysts believe they will make grim reading for stores hopeful of a bumper pre-Christmas profit.

A spokeswoman for Dixons said: "We have a number of very good price deals at the moment on specific goods and potential Christmas items such as digital cameras and DVD players. This is all part of our sales strategy, which is planned some time in advance.''

But on Oxford Street in London yesterday - arguably Britain's busiest shopping area - it appeared that shoppers were holding out for still more reductions. Most stores had large promotions advertising 20 per cent off deals and other price cuts, but the ploys did not seem to be attracting huge numbers of customers. James Roberts, 26, was shopping with his girlfriend Sarah Smyth after both had taken the day off work to buy Christmas presents. He said: "There are a lot of sales but I just keep thinking that everything will get even cheaper once the real Christmas sales start. Last Christmas, we didn't actually buy each other presents for the day. Instead we waited until the sales started on Boxing Day.'' His girlfriend added: "We got far more than we would ever have afforded before Christmas.''

Most of the big department stores were reluctant to discuss sales figures and customers in the past few weeks. But it is telling that beleaguered Marks & Spencer staged its first pre-Christmas price cuts for the first time this year.

A spokeswoman for the company said: "We haven't done it before but in November we had a one-day spectacular to launch our Christmas range and it proved to be so popular that we did it again yesterday.

"There was 20 per cent off on items throughout the store and it has been a huge success. This is something we had always planned to do although there are no plans to do any more in the run-up to Christmas.''

Lakeside shopping centre in Essex has also been slow to see the pre-Christmas crowds this year. A spokeswoman said: "It has been quieter than we expected for the first few weeks in November, but we are now beginning to see healthy week-on-week sales and this week has been absolutely fantastic. It doesn't just seem to be about promotions, although the Marks & Spencer spectacular yesterday was popular but New Look, which hasn't done any price cuts, is the best performing store in Lakeside at the moment.''

Debenhams department store is offering 10 per cent off its whole range this weekend. But the fierce, inter-store competition was evident by a refusal by Bhs to even give details of its pre-Christmas promotions.

SAMPLING THE OFFERS

M&S

Single-breasted, self- stripe jacket was £75, now £59 (21 per cent off); "Posh" Herringbone Coat was £89, now £69 (22 per cent off).

L K BENNETT

Checked coat was £199, now £180; Black kitten-heeled shoes were £99 now £79.

DIXONS

Fuji digital camera was £249, now £99; Ferguson portable DVD player was £299, is now £179.

DEBENHAMS

Jasper Conran luxury faux fur throw was £120, down to £108; Black dress with diamante brooch was £140 now £126.

"Santa weekend" starts today with 10 per cent off across products at the department store.