UK shoppers defy weather and bleak economic climate

The number of people visiting stores ahead of Christmas is significantly down from last year, but overall spending is up, a sign of the many shopping options that are available.

Ice, snow and even sub-zero temperatures did not dampen the spirits of Christmas shoppers who flocked to London's Oxford Street.
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The determination of Christmas shoppers in the UK to spend has been sorely tested this year by harsh winter weather.

Blizzards at lunchtime on Saturday took shoppers and travellers by surprise on what should have been the busiest shopping day of the year. Brent Cross, one of London's oldest temples to Mammon, even closed nine hours early because of the danger to shoppers.

But by Sunday, the Blitz-spirit had taken over and retailers were reporting a more furious trade than ever. With the possibility of more snow later this week, it seemed that everyone was determined to get their shopping done early.

And yet there is no sense that the wider economic woes are causing people to keep their wallets in their pockets. Unemployment is rising and last week hit a 16 year high; public-sector workers fear job cuts; pay freezes have been widespread this year, and house prices are no longer increasing in value and making us all feel wealthier.

Retailers were worried that sales this season would not live up to past records, but last week's figures from the Confederation of British Industry (CBI), showed that the Christmas miracle has happened again.

Sales, until last weekend at least, were rising at their fastest pace for eight years. Clothing retailers, department stores, grocers, and hardware and do-it-yourself outlets were among those enjoying the strongest year-on-year growth in sales volumes in early December.

There is a theory that many people are shifting spending that might have taken place in the new year into December to beat a sales tax rise that occurs in January.

Howard Archer, the chief UK economist at the consultancy IHS Global Insight, says: "Consumers are determined to have a good Christmas despite significant economic worries and uncertainties." He warns, however: "The concern remains that consumers will limit their spending in 2011 in the face of serious headwinds".

This is a northern European country that has few daylight hours between the end of October and the end of January. Seasonal spending is one of the main ways that consumers cope with the gloomy British winter.

John Lewis, a bellwether of the High Street, rang up £121 million (Dh691.5m) of sales in the first week of December - the most it has ever taken - and it expected to beat that figure before Christmas.

And all this despite evidence that there were significantly fewer shoppers out and about at the start of the month. One survey showed the number of shoppers in Yorkshire and Humberside plunged 42 per cent. Some of the biggest shopping centres, just outside London, posted 33 per cent falls.

One of the reasons there seems to have been little drop-off in spending is because of the sheer number of opportunities to shop. Extended opening hours for shops are commonplace, while supermarkets routinely open 24 hours a day. Niche online retailers bombard middle-class homes with catalogues - stores like Not On the High Street, Brora, Hush and Great Little Trading Company - and daily e-mails, displaying their wares.

Bricks and mortar retailers also have a hefty online presence. And despite reductions in shopper numbers, British children will not be suffering from the economic pinch on Christmas morning. Parents say they will spend an average of £168 on each child, according to a poll by an insurance group.

Children under four will typically have £124 spent on them, and a child aged 11 to 18 will receive £210 worth of gifts. Parents in the economically deprived North East are the most generous, spending on average £226 on presents.

The good news for shoppers is that this is the Christmas to bag a bargain. So concerned are the stores by the threat of more severe weather, they are slashing prices by as much as two-thirds to make sure people hit the high street.

But there is another darker footnote to this seasonal madness. The spending hangover may last considerably longer than the party.

Who will want to go out and spend when the credit card bills come in January? Certainly not the 100,000 or so seasonal staff who were taken on just for our Christmas binge.