Christmas shopping in Norwich on Saturday December 11th 2010

Everyone knows that times are tough and people have less money to spend, while shopping habits are also shifting fundamentally with more and more of us opting to buy online.

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Yet a study by the British Retail Consortium and KPMG out today suggests that, overall, things were not as bad as feared – with UK retail sales values 2.2pc higher than December 2010, when heavy snows hit trading.

The retail sales monitor also indicated a strong pick-up in food sales growth, and non-food sales also improved, but with sales often promotion-led.

Clothing and footwear showed good gains on last December’s weak sales. Homewares improved, but big-ticket items and furniture sales remained down on a year ago, hit by consumer caution.

Stephen Robertson, director general of the British Retail Consortium, said: “A better than hoped-for December closed a relentlessly tough year for retailers, but these figures hinged on a dazzling last pre-Christmas week and were boosted by some major one-off factors. We’re not witnessing any fundamental change in customers’ circumstances.”

Retailer Next last week reported disappointing in-store sales in the three months to Christmas, but overall sales were up more than 3pc thanks to strong performances from its online and catalogue brands. However John Lewis reported a strong week.

Other retailers posting updates on their performance over the Christmas break this week include Marks & Spencer, Argos owner Home Retail Group, chocolatier Thorntons and supermarkets Tesco and Sainsbury.

Yet well-known names were already struggling – problems linked to longer term declines in the business rather than any short-term Christmas trend. Research by professional services firm Deloitte revealed 183 retailers went into administration in 2011 compared to 165 the previous year, an increase of 11pc.

Outdoor leisure specialists Blacks, which owns the Milletts stores, yesterday was bought by JD Sports after going into administration, and more than 300 jobs have been lost at toys and games retailer Hawkin’s Bazaar and its Suffolk-based parent company, Tobar, after it went into administration.

Fashion retailer D2 jeans, which has a branch in King’s Lynn, also went into administration last week, though the store was saved after menswear retailer Blue Inc agreed a deal to buy 20 stores.

And questions remain over the future of HMV, which yesterday reported an 8.1pc fall in group like-for-like sales in the five weeks to Christmas and said there were “material uncertainties” which may cast doubt on the group’s ability to continue.

But locally it is not all doom-and-gloom. Yarmouth-based independent retailer Palmers said it had been a record Christmas, while Norwich jeweller Winsor Bishop also saw a leap in sales boosted by a £500,000 investment in its London Street store.

Paul Roy, buying and marketing director at Roys said the business had rounded off the year with a creditable 11pc year on year increase in trade from last December.

Areas of strength included fresh bread, greengrocery and food and drink and he said the company remained positive about prospects for 2012.

“I suspect Norfolk is more likely to avoid recession than other parts of the country and therefore we look forward to another exciting year along with other local retailers,” he said. “Many of the national chains in the high street don’t seem to be in such good order and the main reason maybe the high street rents that in many cases are on an upward only basis.”

Robert Hughes, managing director of the Hughes Electrical Group, said sales leading up to Christmas were much stronger than last year, helped by an extra Saturday’s trading and the mild weather.

“Areas with the best growth were anything to do with food preparation, such as coffee makers, while home theatre sound systems also sold very well,” he said. “Perhaps this indicates people are looking to spend less time in coffee shops, restaurants and cinemas yet still want to enjoy a quality experience in their own homes.

“No doubt this reflects the difficult economic climate many find themselves in, which would also explain why larger, more expensive items did not do as well.

“Sales of digital recorders in our Norfolk and North Suffolk branches were particularly strong as customers who recently went through the digital switchover looked to update their equipment, which was an ideal Christmas present.

“As expected, sales in the week after Christmas in 2011 were down on 2010 – the best in our 90 year history – when people rushed to beat the impending VAT increase.

“While, overall, the economy is unlikely to improve this year there are two events which should be good news for our industry – the Euro Football Championships and the Olympic Games.”

Stefan Gurney, Norwich City Centre Partnership manager, said: “The conversations I have had with retailers show that it has been a difficult climate in 2011, but they have seen some good results.

“A lot of retailers have seen a strong finish to the year as a lot of people were holding back. I think 2012 will be another difficult economic climate but I think Norwich is better off than a lot of other cities because of the strong retail mix.”

Peter Mitchell, managing director at Jarrold, described 2011 as being a “rollercoaster”. He thought concerns about the economic climate was one of the reasons shoppers were being cautious in their spending, and said he hoped to see a little bit more stability in 2012.

And he felt there would be more of a trend of people wanting to reconnect to their roots and buy local products which would be good for Norfolk, and spoke of the need for businesses to step-up and do more to promote Norwich. “It has been quite a tough year,” he said. “We went into 2011 expecting the second half to be better than the first half and actually the autumn proved to be quite challenging. However, as we got into December and Christmas it got consistently better. It has been quite a rollercoaster.”

But perhaps the story of the retail figures is that we should not read too much into them either way – and they can only tell a story for each individual business. Helen Dickinson, Head of Retail, KPMG, said the increases noted in retail sales monitor were against a background of heavy discounting and long opening hours. “While these results must be viewed in a positive light, it must also be noted that they have come at the end of a year which witnessed declines in most non-food sectors and are against December 2010’s weak results, which saw sales badly affected by poor weather,” she said. “Sadly no one expects this level of demand to be indicative of the year ahead.”