Department stores performed best
Christmas trading sparkled this year, contrary to some forecasts, with three quarters of retailers reporting a like-for-like sales increase, compared with two thirds in 2005, according to a report by Grant Thornton.

Department stores were the highest performing retailers - for the second year running - with an average like-for-like increase of 6.5 per cent, followed closely by entertainment and food and drink retailers, which reported like-for-like rises of 5 per cent.

The entertainment sector was bolstered by a 16.6 per cent sales rise at Game - the strongest performance of any retailer. Other top performers were Selfridges, John Lewis, Kesa and House of Fraser.

At the other end of the spectrum, the majority of generalist and clothing/footwear retailers revealed like-for-like sales decreases. The poorest performances came from Next and Jessops, which both reported sales declines of 6.9 per cent. Blacks Leisure, Woolworths, Alexon and Debenhams were also on the bottom rung.

Grant Thornton retail services head David Bush said: 'There has been a stark contrast between those retailers that got it right this Christmas and those that got it wrong. Much of this success can be attributed to careful planning, which ensured that stock levels and ranges were optimally balanced and that profit margins were maximised. This allowed the majority of retailers to hold their nerve right up until Christmas, ensuring that the bulk of promotional discounting occurred after December 25.'

According to Bush, the winning retail formula for Christmas 2006 included having a consistent product range across the store, providing consumers with premium products and operating under one roof.

Online shopping featured strongly this Christmas, accounting for sales of more than£7.5 billion in the 10 weeks to Christmas.