UK to see modest growth in Christmas sales - report

LONDON Mon Nov 26, 2012 12:16am GMT

Shoppers walk pass sale signs and a busker along Oxford Street on the penultimate Saturday before Christmas in London December 17, 2011. REUTERS/Luke MacGregor

Shoppers walk pass sale signs and a busker along Oxford Street on the penultimate Saturday before Christmas in London December 17, 2011.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - Christmas sales in Britain will edge up by 1 percent this year, though with inflation running at 2.5 percent sales volumes will fall, a report published by Deloitte on Monday showed.

The business advisory firm forecast total retail sales in December, excluding fuel, of 36.6 billion pounds, up from 36.2 billion pounds in the same month last year.

Deloitte said around 10 percent of all in-store retail sales in December, some 3.2 billion pounds, would be influenced by smartphones, with another 330 million pounds of sales made directly through the devices.

It predicted a further 500 million pounds in sales would be made through tablets. Total online sales were forecast to rise by 17 percent.

Though about two-thirds of Britain's GDP is generated by consumer spending, many retailers are finding it tough going as consumers' disposable incomes are eroded by rising prices, subdued wages growth, government austerity measures and job insecurity.

Earlier this month the Bank of England warned Britain faced years of meagre economic growth and rising prices, adding its ability to numb the pain was nearing its limit.

Deloitte also said the festive period would be characterised by polarisation between winners and losers.

"Increasingly, we are seeing examples of certain retailers performing strongly and others weakly within the same sector," said head of retail Ian Geddes.

He said shoppers were responding to those retailers that combined desirable products and brands with exceptional customer service across all channels - stores, online, mobile and tablet. ($1 = 0.6271 British pounds)

(Reporting by James Davey; Editing by Helen Massy-Beresford)

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