Fears of poor festive trading have been confounded and Christmas is all but in the bag, leading retailers say.

Store chiefs are ready to breathe a sigh of relief as the final days of trading get under way, having avoided last year’s level of pre-Christmas discounting and managed stock tightly.

High street bellwether John Lewis had another strong week, as Retail Week went to press. Director of selling operations Nat Wakely said: “With this being the last shopping weekend before Christmas, we are expecting the strong sales to continue across our shops as customers finalise their Christmas preparations.”

New Look chief executive Carl McPhail said Christmas trading has “started strongly and while the volume of promotional activity remains high, retailers are conducting themselves in a much more disciplined manner compared with a year ago”.

Another leading fashion chief said Christmas “will be OK, bearing in mind how bad it was last year”.

Shop Direct Group chief executive Mark Newton-Jones said: “The internet has gone great guns.
In November and December it’s been 30% ahead year on year. All in all, it has been a good end to what has been a difficult year.”

Comet managing director Hugh Harvey said: “The trends we’ve seen in previous years we’ll see again. It will happen, it always does. It will be late, it always is.”

The grocers have also enjoyed strong sales and are gearing up for a round of food promotions this weekend. Tesco, Sainsbury’s, Asda and Morrisons are pushing their top-end ranges in an attempt to poach custom from Marks & Spencer and Waitrose, as shoppers treat themselves to higher-priced food for Christmas.

A study by Ernst & Young showed discount levels and promotions across the sector have been markedly lower than last year. Pre-Christmas discount levels have so far averaged over 26% of the full selling price,  against just under 31% last year. Ernst & Young director of retail Jason Gordon said retailers have “considerably less stock to clear this year, so it’s no surprise that discounting levels are lower”. He added that retailers have held their nerve in light of slightly increased consumer confidence.

However, the outlook for 2010 is difficult. Many retailers expect trading to be tougher than this year with the VAT increase, high unemployment and election uncertainty. However, the World Cup is likely to give retailers a boost in the summer.