Retailers dream of a strong Xmas

Cash tills are set to jingle to the tune of happy trading this Christmas, according to a poll of retail executives.

Some 80 per cent of the 150 pundits - mostly retail financial directors and managing directors - surveyed by Barclays said Christmas trading prospects looked 'good' or 'very good'. More than half said they felt positive about the outlook for the next 12 months.

Barclays national retail director Paul Clarke said: 'There have been signs of an easing in deflationary pressures, with the trend for decline in shop prices - which had been evident for over a year - being reversed in June.'

However some economists are singing to a different tune. About 510 retailers are expected to go bust in the first quarter of 2004, compared with 295 in the same period in 2003, according to a study by BDO Stoy Hayward.

Economist Sukhy Kullar said there could be a squeeze on household budgets caused by sluggish gains in wages, a weak employment trend and this year's National Insurance rise.

A hike in interest rates next year could also slow consumer spending.

'Low interest rates have led to consumers building up debt. It has to stop at some point,' said Kullar.

A merry Christmas could, however, turn this 'doom and gloom' prediction on its head, she added. 'Most business failures in the retail sector happen in the first quarter and are dependent on Christmas.'