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Two weeks in the UK - So, what was Christmas really like...

Three weeks after Christmas the retail market is still reporting a mixed bag of trading for what is, for the majority, the most important trading period of the year.

According to the British Retail Consortium UK retail sales values rose 2.2% on a like for like basis against December 2010 – the best sales performance of the year since the previous January.

While the figures were better than many had dared to hope the BRC also warned that they were of little surprise as snow in December 2010 had badly hampered shoppers ability to shop and that the final week of the year was also boosted by other one off factors such as an extra day’s trading and heavy discounting. It warned retailers not to take the figures as indications of a change in consumer confidence.

But for some retailers the season has brought good news. The likes of Debenhams, Ted Baker, Blue Inc, New Look, House of Fraser and Superdrug all reported good sales uplifts although again these are against weak comparatives for the previous year.

But for other retailers such as Argos and even Tesco the Christmas trading period wasn’t quite so rosy, with Tesco’s revelation of poor trading knocking £5 million from its value last week.

And as unsurprisingly in the current climate there have some major casualties amidst the flurry of trading update with administration deals for shoe chain Barratts Priceless collapsing into administration ahead of Christmas and sales of La Senza to Alshaya and Blacks Leisure to JD Sports after their post Christmas administrations. D2 and Hawkin’s Bazaar also collapsed and in this week alone it has also been revealed that Past Times has gone into administration and that value chain Peacocks faces the same fate after its bank pulled funding on the chain this week.

For December 2011 value as ever remained high on shoppers minds with QD Stores this week reporting its best ever Christmas with a 5.7% like for like sales rise for the five weeks to Christmas Eve.

And as expected it was discounts that brought the bargain hunters out in force post Christmas too with record numbers hitting the stores for Boxing Day as customers battled to snap up the bargains.

And there was also good news for savvy savers in the last couple of weeks. This week the Office of National Statistics revealed that its measure of annual inflation – the CPI - had fallen for the month with the biggest drop in more than three years since November to December 2008. The figure was down from 4.8% in November to 4.2 % in December 2011 with falls in petrol gas and clothing largely responsible for the change.

Earlier this month the BRC-Nielsen Shop Price Index for December 2011 revealed the lowest shop price inflation for 16 months – down to 1.7% for the month compared to 2% the previous month. The fall was, according to the BRC driven largely by price cuts in electricals, clothing and footwear where prices were all cheaper than last year and led to BRC director general Stephen Robertson praising the efforts retailers are making to keep costs down for customers. He said that the competition within the sector had let to a “blizzard of promotions and discounts” ahead of Christmas which had helped struggling families. He warned however that customers would be reining in their spend post-Christmas.

So while it seems that Christmas may not have been the turkey many were expecting the Christmas blowout came for many – but retailers and customers are likely to be paying for it with tighter grips on the purse-strings well into 2012.

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