Analysts predict merrier Christmas for retailers

By ROB DAVIES FOR THE DAILY MAIL
Updated: 16:51 EST, 18 December 2009

John Lewis and Tesco are on course to be the big winners this Christmas as shoppers take to the streets in search of last-minute presents.

Retail analysts are predicting the return of festive cheer to the High Street, as consumer confidence rebounds from lows seen last year in the depths of the credit crunch.

The British Retail Consortium is predicting that shoppers will spend £2billion tomorrow alone, while total retail sales for December are expected to be well ahead of last year's £34.5billion.

The British Retail Consortium is predicting that shoppers will spend £2billion tomorrow alone

'An increasing number of customers are feeling more positive than this time last year and the sales figures reflect that,' said Stephen Robertson, directorgeneral of the BRC.

Customer footfall over the last weekend before Christmas is set to rise 4 per cent on last year, said retail data monitoring firm Synovate Retail Performance, despite a disappointing November.

Research from Verdict revealed how dominant retailers have become in the economy compared with a quarter of a century ago, now accounting for 26 per cent of national income.

Jon Wright, head of retail research at analysis firm Euromonitor, said high street giants and online retailers were likely to be the big winners in the Christmas rush. He singled out John Lewis as the most likely star performer over Christmas, after the department store reported sales up 16 per cent year-onyear in three days to Wednesday.

Major chains such as Tesco (down 3.35p at 406.65p) and Asda will also rake in the cash, he said, while online retailers such as Amazon.com will benefit from the continued surge in internet shopping and the cold weather.

But the success of online outlets and department stores is likely to spell misery for high street electrical stores such as PC World owner DSG (up 0.55p at 35.8p), Comet and Currys, as customers turn to cheaper options.

Customers hoping for a repeat of the bargains on offer last year are likely to be disappointed, as stores shy away from offering large-scale discounts.

One leading analyst said: ' People are holding out until the last minute, playing chicken with the retailers to see who will blink first in the hope that they'll cut prices.'

'However, retailers are in a much stronger position than they were last year,' he added.

Last year retailers built up far too much stock, but this year they have been far more cautious in a bid to avoid being saddled with tons of unwanted goods.