Early Easter hits the High Street

THE earliest Easter for 16 years threatens to hurt retailers already suffering from tough trading on the High Street and could cost Chancellor Gordon Brown an astonishing £4bn in lost tax.

Because this Easter and last have fallen into the financial year 2004 to 2005, the extra two bank holidays cut total annual working time by almost 1%.

And even tax revenue from extra spending on traditional Bank Holiday pursuits, ranging from barbecues to DIY, does not balance out the overall loss.

Stuart Robertson, economist with Morley Fund Management in the City, said: 'Tax receipts will be hit by between £3bn and £4bn because of the loss of economic activity from closed factories and the self-employed taking time off. The Chancellor will have to wait until next year to get the money back.'

But Brown's problems are small compared with those facing retailers. Already reeling from one of the worst Christmas sales performances on record, they can expect little relief from the early Easter.

Photographic equipment chain Jessops, clothing retailer Next, Woolworths and Topps Tiles all warned last week that trading was tough at present. And as fears of higher interest rates take hold and the mixed weather forecast dampens consumer spirits, the prospect of a bumper Easter is receding.

Tim Denison of retail consultancy SPSL believes there will be little respite for retailers. He said: 'The number of shoppers is predicted to fall by 3.1% against last year's later Easter fortnight, when Easter Sunday fell on 11 April.'

He added: 'Even the timing of Easter is conspiring against shopping. Traditionally, it is the time of year when DIYers and gardeners get active, go out and spend. But the earlier it falls, the fewer the people who get into makeover mood. And this year, Easter is the earliest it has been for 16 years.'

The mid-market mainstream fashion retailers are believed to be the hardest hit. Next talked about 'challenging' conditions that had pushed underlying sales into negative territory.

M&S chief executive Stuart Rose echoed the sentiment, adding that uncertainty before the General Election, rises in interest rates and bad weather were all playing a part.

Peter Dixon, economist with Commerzbank, said: 'Figures show that the general trend in retail sales is at its weakest since the early Nineties.'