42% of retailers expect this Christmas to be better than last year but say it will remain driven by heavy discounting, with sales affected by the VAT rise in Jan.
The British Retail Consortium's Christmas Trading Snapshot Survey published today revealed that, while 58% of retailers believe sales will be the same as last year, an encouraging 42% said that they thought Christmas would be better than in 2008.
Even more positive was that none of the respondents thought sales would be worse than last Christmas. However, nearly half of retailers expect greater discounting in the run-up to Christmas and 53% thought December's sales will be boosted by customers bringing their purchases forward to beat January's VAT increase.
Nearly half of retailers also believe the VAT rate increase to 17.5%, which has been confirmed by the Chancellor for January 1, will have a harmful affect on high street sales.
BRC director general Stephen Robertson said: "There's some good news here but we're not out of trouble yet.
"I'm reassured that retailers are more confident about their prospects this Christmas but remember the comparison is with dramatic sales fall last year. There are more customers willing and able to spend now but, for many retailers, it's taking even more discounts to persuade them to buy.
He added: "The impact of the VAT increase is a concern for half of respondents but other clouds are gathering. Customers are cautious. Jobs are a big worry and neither will be helped by the tax-battering promised by the Chancellor."