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Sat, Nov 25, 2006 - Page 10 News List

UK holiday sales likely to rise but not jump: study


Christmas sales in Britain appear set this year for another bonanza, but fewer retailers are likely to share in it amid signs consumer spending is wavering, a study said yesterday.

Consumer, media and market research group Mintel predicted that "this December, retail sales will be up by no more than one percent compared to December 2005."

"Last year, Christmas retail sales hit an all time high and although we are likely to see a similar level of spending this year, such marginal growth could be cause for concern for many retailers," it said in a statement.

December retail sales, including value added tax, for last year hit ?27.6 billion, (US$52.86 billion), it said.

"With evidence pointing to a more cautious consumer, especially after the second interest rate rise earlier this month, there is every possibility that consumers will start to reign in their spending even before Christmas," Richard Perks, director of retail research at Mintel, said in the statement.

Firms like supermarket chains Tesco and Sainsbury's as well as food and clothing behemoth Marks and Spencers might grab the lion's share of the marginal growth, "leaving little advantage for the others to enjoy," Perks said.

This year, Mintel said, a growing number of Britons are expected to do their Christmas shopping ahead of time. Around 33 percent will wait to the last minute, compared to 42 percent in 2001.

Mintel added that 41 percent of Britons intend to buy online, and online sales will be approaching ?2 billion, including VAT this December, higher than in previous years.

"With the popularity of the Internet increasingly clear for all to see, it is now more important than ever that high street retailers make their brands available online as well, otherwise they will lose their market share of retail sales," Perks said.

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