Fewer discounts on high street

Big discounts in the Christmas shopping rush were harder to find this year as high street chains fought to protect their margins, a report has said.

Combined with the ongoing caution of UK consumers, business advisory firm BDO's December sales tracker points to "steady but unspectacular" trading.

The report, which studies like-for-like spending at non-grocery retailers with annual sales of between £5 million and £500 million, showed sales growth of 1.9% on a year earlier, despite a drop of 3.7% in the week to December 16.

BDO said tighter stock planning and better strategies for discounting meant firms were able to achieve an improvement in margins on a year earlier.

The report said: "Although experiencing relatively modest year-on-year sales rises, many retailers will still count December as a success."

Non-fashion was the strongest sector, with growth of 7.1% thanks to increased sales of Christmas "gifting" items from well-established brands and stores. Fashion sales were flat year-on-year due to poor weather and strong figures for the same period a year earlier.

Much of the growth came from the internet, with BDO reporting a 30.9% year-on-year rise in non-store sales as shoppers became ever more comfortable with online purchasing - especially from big name brands - as well as making use of growing wi-fi and 4G coverage to pick up bargains while on the move.

BDO's national head of retail Don Williams said: "Last year we saw several stores having to slash prices to levels that really hit their profits after getting caught with too much stock.

"This year there has been a clear focus on protecting margins. By building up to Christmas early in a planned and measured way there has been less knee-jerk discounting.

"At the same time consumers are continuing to feel the pinch of hard economic conditions and are being much more careful about when and where they spend their money."