A sales treat

The January sales may be brought forward to this month as high street shops fight for customers, it was predicted today.

A report released by the British Retail Consortium says that sales growth has reached a two-year low just ahead of the crucial Christmas season.

Big department stores are thought to be among the worst hit. Already Harrods has said it intends to break with a 150-year tradition by bringing forward its January sale, which normally starts on the first Wednesday of the month, to 30 December. Others, such as House of Fraser and Bhs, are running promotions and money-off deals.

Signet, the jewellery retailer which includes the H Samuel and Ernest Jones chains, has warned of a fall-off in sales towards the end of the year, while some City rumours suggest that Next, the clothing chain, is also performing less well than hoped.

Designer goods chain Gucci has also cut its profits forecast by nearly a quarter after admitting that weaker sales last month had forced it into less optimistic sales forecasts for Christmas.

Many high-street stores are understood to be worried that stockpiles of festive gifts - particularly clothes and perfumes - could be left on the shelves unless prices are slashed early.

The prediction of a lacklustre Christmas is likely to spark fresh concerns about the prospect of economic recovery in the retail sector after the 11 September slump.

In its report, BRC said sales last month were up only two per cent on a year ago - the slowest growth since November 2000.

Director-general Bill Moyes said: "Christmas is likely to be satisfactory, but perhaps not spectacular." Amanda Aldridge, head of retail at accountants KPMG, said that shoppers were ready to spend money on a bargain, but she added: "Retailers will be holding their breath into the final week this year before they can assess whether it is a really good Christmas".

The survey comes only days after a Confederation of British Industry report said that shop sales had fallen well short of expectations last month.

The BRC report identified clothing sales as being badly hit, along with DIY products, cosmetics and fragrances. Furniture, though, stayed "reasonable".

Some experts, however, blamed last month's unseasonably warm weather for hitting clothing sales.