'Very good' Christmas predicted for shops

Date: 16th December 2009

Smaller shops are likely to enjoy strong Christmas sales, according to the director of retail research at Mintel.

Richard Perks said today (December 16th) that many consumers have more money in their pockets to spend this year due to the low interest rate environment and shoppers making extra purchases before VAT goes up from 15 to 17.5 per cent on New Year's Day.

The comments follow the announcement from retail giant John Lewis that they took in record sales of £110 million last week.

Since March 2009, the Bank of England has held interest rates at an all-time low of 0.5 per cent, leading to across-the-board reductions in the APRs offered by mortgage deals.

Mr Perks said: "The thing is people are actually better off at the moment than they were this time last year, because of the lower interest.

"The other big factor is the VAT increase on January 1st and I think already you can see that people are out there buying household goods - the big items that they had probably been putting off buying but now want to go in before VAT going up."

Figures released recently by the British Retail Consortium showed that 42 per cent of shopkeepers expect to see stronger sales during Christmas 2009 than they did last year.

Posted by Thomas Fletcher