Analysts point toward positive signs as retailers gear up for peak season

Bumper Christmas sales on horizon

This Christmas is increasingly looking like it could be a bumper deal for retailers after two separate reports highlighted positive attitudes towards spending during the holiday season.

The first, from analyst Verdict, predicts a sales bonanza for the last four months of 2007 of £77.9 billion, or £1,300 a head being spent on Christmas shopping; a rise of 3.8 per cent over the same time last year.

Electrical products such as PCs, and in particular laptop computers, as well as wide screen TVs and smaller models for the kitchen or bedroom are expected to sell particular well.

Other products expected to largely drive sales include video game consoles such as the Xbox 360 and Wii, as well as satellite navigation devices, largely driven by price erosion.

Online retailers also have had their prospects boosted with Forrester Research saying that consumer spending on the internet will reach £13.8 billion. Comparing it to last year’s research from IMRG, it’s a rise of 42 per cent.

However, there was some gloom in the good news, with the report warning that due to rising mortgage costs and small pay rises, many customers will be putting their purchases on plastic, raising the risk of a massive drop off in spending towards the end of the fourth quarter and into the first quarter of 2008.

"Shoppers never want to be seen as mean at Christmas and will postpone any cutbacks until the New Year," said Verdict retail analyst Nick Gladding. "However, having already run down their savings this year, consumers will need to rely heavily on credit to fund their seasonal generosity."

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