Christmas shop giveaway

Late Christmas shoppers are being offered a sales bonanza because of the worst season for retailers in living memory.

The slump has forced some of the high street's biggest names into offering huge price reductions.

In Oxford Street alone more than 100 shops are offering discounts, 82 of them full-blown sales.

A snapshot survey of high street chains in central London reveal some incredible bargains, especially in clothing. And some stores admit they are cutting prices even more today. Some shops are playing down their price cuts in case they destroy the excitement of the New Year sales.

But others are proudly displaying posters announcing: "January sale now on, 70 per cent off."

A splurge in the last three days has not been enough to rescue what retailers are calling "Black Christmas". Trading today is likely to be hit again by a strike on the Piccadilly line which serves many West End destinations.

Richard Ratner, of City broker Seymour Pierce, said: "We believe sales will be down two to four per cent over the month." Among the worst performers are thought to be House of Fraser, Boots, WH Smith, Woolworths and Marks & Spencer.

Another chain thought to have suffered is the sports retailers JJB, which brought its January sale forward to mid-December in a desperate attempt to boost business.

However, analysts said the tactic did not seem to have worked. "There still seems to be plenty of stock to shift," said retail analyst Iain McDonald. In the West End today, hundreds of shops are slashing their prices to clear unsold stock.

"There are definitely more promotions than this time last year," said Mr Ratner.

"Most shops are down on last December and it will get worse before it gets better. There's a lot of stock to clear and it ain't being cleared because this week isn't as good as people thought.

"People simply haven't been spending as much this Christmas."

Mr Ratner warned shops not to succumb to the temptation of cutting prices too much for a quick sale. It might shift stock, but it would hit profit margins in the longer-term.

And consumers are also getting wise to shops' tricks. For example, M&S's 24-hour sales in November and December successfully attracted customers on the day. But indications are that many will not be back until the next one. "You have to know where to go for the real bargains," said pianist Lefki Karpodini, 28, shopping in Oxford Street.

Marketing manager Bart Moors, 33, was delighted. He said: "I was really surprised, but it's brilliant. I've bought my girlfriend a bag and now I'm looking for more bargains to fill it with." Sally Humphreys, director of the Oxford Street Association, confirmed that December

sales had been patchy. "Some responded with sales in the week before Christmas, but by today virtually every shop will have a sale on apart from John Lewis," she said.

John Lewis revealed yesterday that its sales were two per cent down on last year in the week to 18 December. Even Next, last year's star performer, is thought to have suffered.

There was speculation that in the week to last Saturday takings at Woolworths and House of Fraser were down by up to 15 per cent. Marks& Spencer is said to have been down "at least" eight per cent in the same period, with some stores down by up to 20 per cent.

The City is now bracing itself for a wave of profit warnings and dismal trading statements from retailers in the New Year. Retailers are now under an obligation from the Financial Services Authority to inform the stock market as soon as they are aware that sales have fallen short of forecasts.

Yesterday a House of Fraser spokesman said: "We do not comment on speculation but we are aware of our obligations to the market.

Of the few success stories, Tesco appears to be a front-runner with strong Christmas sales completing the best year in its history.

Analysts said the high street had been hit by a hangover from heavily

indebted consumers worried about more expensive mortgages and other rising bills such as council taxes.

There has also been a huge increase in the level of shopping on-line.

Meanwhile, some of the highest-profile stores are keeping their nerve. Selfridges-sale starts on Boxing Day, followed the next day by Harvey Nichols, John Lewis, Peter Jones, and Next, which opens its doors at 5am. The Harrods sale does not start till 3 January - although "January sale" bargains are already available through the website.