Hitachi lift from interest-free lure

HIGH STREET retailers are using an increasing number of 'interest-free' credit schemes to tackle a slowdown in consumer spending, according to figures from credit supplier Hitachi Capital (UK).

Half-year profits at Hitachi Capital surged 26% to £6.3m as customers of its consumer finance division - including furniture store DFS, and jewellers Peter Jones and Mappin & Webb - sought to support sales with credit schemes.

Chief executive David Anthony said: 'The three months to August showed a 13% annualised growth in the retail instalment market, reflecting a weakening of High Street demand.'

He added that retailers were enticing more shoppers to spend by offering interest-free periods for the consumer, 'but the retailer still has to pay Hitachi Capital'.

Profits within Hitachi Capital's consumer finance division rose to £2m for the six months to 30 September, 18% more than a year ago.

Hitachi's vehicle finance division posted a 33% increase in profits to £3m, helped by a 27% increase in the number of cars on which it lends to 34,200 vehicles.

Group bad-debt charges were reduced by 2% to £3m.