Festive cheer or one last hurrah?

Jan 27 2010 by Chris Knox, The Journal

As the recession finally ends, Christopher Knox looks at the latest figures from high street retailers and asks whether a happy Christmas will lead to strong trading in 2010.

WITH retailers experiencing one of the worst Christmases in living memory in 2008, the scene was set for a very uncertain trading period in the lead up to the recent festivities.

However, high street bosses have been pleasantly surprised by an apparent bounce-back in consumer confidence, with shoppers spending around £1.37bn on Christmas Eve alone.

Such extravagance was not confined to one day, with many shoppers celebrating the end of a tough year with a spending splurge that presaged the end of the recession.

Figures from the British Retail Consortium (BRC) show that total retail sales rose 6% on a like-for-like basis in December, compared to the same period last year, when sales had dropped 1.4% due to the fresh turmoil in financial markets hitting consumer confidence.

The North East’s busiest shopping street was typical of many across the country. Northumberland Street in Newcastle saw a 9% increase in footfall in December, compared with a 19% slide in the Christmas before, with shoppers intent on enjoying the festivities despite the freezing temperatures.

As well as a desire to treat families after a gloomy year, the final few weeks of last year’s temporary reduction in VAT from 17.5% to 15% also tempted more people back on to the high street.

Stephen Robertson, director general at the BRC, said: “These are stronger figures than we dared hope for. After a surprisingly muted November, this is the best total sales growth for a December since 2005 and goes well beyond just making up for the sales fall the sector suffered a year ago.

“The figures were certainly helped by the comparison with last December’s terrible results but customers clearly felt more confident about spending than they have for some time.”