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Sales to jump 3%, as shoppers to have final fling this Christmas

Published: 8 November 2010
Brits are a nation addicted to shopping, says BDO, with predictions that spending will continue in 2011, despite a challenging consumer environment.
Sales to jump 3%, as shoppers to have final fling this Christmas
Most retailers are approaching Christmas with a degree of caution, according to accountancy firm BDO, believing it will be difficult to make meaningful gains on the strong performance last year. On the whole, the high street significantly outperformed predictions over the 2009/2010 festive period, with just nine of the retailers who publicly released data, reporting negative like-for-like sales, against 54 positive.

BDO believes the trend will continue, forecasting a 3% growth in sales (4% in like-for-like terms). The firm said in its latest report: "It may sound like a cliché but Christmas always comes every year, and consumers pretty well always spend more every year, whatever the state of the economy."

The only complication there may be, says BDO, is that with Boxing Day falling on a Sunday, trading is limited to six hours. As a result, many retailers may push back the start date of their New Years sales to December 27. Retailers with a transactional website, however, will be able to make great use of their online channels over the period.

The firm also believes, despite the doom and gloom of 2010, Brits' addiction to shopping is what helped keep up the momentum in spending throughout the year. "Contrary to expectations, we have not witnessed a dramatic slump in spending,.. In fact, if ever a demonstration were needed of just how addicted the British consumer has become to shopping, and just how good retailers in this country are at exploiting this, the last 12 months makes a perfect example."

Looking to 2011, BDO believes upward pressures on pricing from rising costs in freight and raw materials, could have a negative impact on shoppers. It could be that, after years of retail deflation, the increase in core selling process will come as a shock to consumers. However, the firm feels that retailers will be able to offset these pressures through re-sourcing and product engineering, as well as clever promotions and stock control.

After its predictions last year that an upbeat Christmas would be followed by positive figures in 2010, BDO explained it is "sticking with this bullish view into 2011". While it expects conditions to become tougher over the course of the year, the firm "still fundamentally believes that consumers love shopping and will therefore find a way to spend, whatever the state of the economy." Its forecast for 2011 is again ahead of city analysts who estimate growth at less than 2% in 2011. BDO has predicted overall sales growth for the year will reach 2.8%.

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