50 per cent more to be spent in January because of gift vouchers

13 April 2012

Spending in the sales is predicted to surge 50 per cent compared to last year after shoppers put off Christmas purchases in the hope of finding January bargains. Spending on sale items over the next month is forecast to hit £5.5 billion, which is up by £1.8 billion compared to a year ago.

A major factor in the high street boom appears to be that many people asked for vouchers or cash for Christmas because they knew the spending power would increase sharply in the sales.

It is claimed that some 2.7 million Britons requested vouchers which are estimated to have a cash value of some £73 million.

The value of cash gifts is claimed to add another £1.2 billion to the sales spending pot.

The queues since Boxing Day are evidence of a sales frenzy driven by the fact that many shoppers simply refuse to pay full-price on the high street.

This year many hundreds more high street outlets were open on December 26, while trading hours have also been extended.

As a result there were some 6.9 per cent more people hitting the sales on Boxing Day compared to last year. The figure was 0.8 per cent higher on December 27.

Price cuts of up to 75 per cent have been available on fashions, while there is a raft of half-price deals on electrical goods and furniture.

Yesterday, Harrods joined the sales frenzy. Its sale was opened by the star of hit US drama series Desperate Housewives, Eva Longoria.

Shoppers queued for Gucci handbags which were selling fast at a price of £200 each - around half the normal retail price.

The £5.5 billion figure comes from a survey of shopping plans carried out for Direct Line Home Insurance.

It found that some 42 per cent of those swamping the high street are looking for savings on clothes and shoes.

Electronic equipment is also big. Thirty per cent are hoping to pick up a bargain flat-screen TV, laptop computer or MP3 player.

Some 13 per cent are looking for a new suite or bed, while 17per cent are chasing cut-price curtains and carpets.

Direct Line said consumers have become more price conscious because they have been squeezed by rising household bills, mortgage rates and council tax. It found that nearly half - 45 per cent - had tightened their belts ahead of Christmas in a deliberate effort to save money to spend on bargains in the sales.

The company's survey also picked up on the large number of people - 2.7m - given vouchers. A separate study from HSBC bank estimates the total value of gift vouchers and cash given to friends and family totals £1.3 billion.

The average amount that people intend to spend in the sales ranges from £171 in London down to £73 in Wales.

Some leading chains delayed launching their sales on December 27, including Marks & Spencer, most John Lewis stores, most Next outlets and the supermarkets.

Retail analysts FootFall measures the number of people entering high street stores and those in shopping malls.

It reported the figure was up by 6.9 per cent on December 26 and 0.8 per cent on December 27 compared to 2005.

Spokesman, Natasha Burton, said: "Consumers were waiting for the post-Christmas sales and that the savvy shopper is now back out shopping with a vengeance.

"The anticipation of yet more bargains continues to draw the shoppers into the stores."

The Meadowhall shopping centre in Sheffield had 90,000 shoppers on Boxing Day, up 2per cent on last year. The figure rose to 140,000 on December 27, which was 3per cent higher.

This pattern is thought to have been repeated at the other major malls across the country.

People queued outside Harrods from 7.30pm on Wednesday for the opening of its sale at 9am yesterday morning. The crowd gasped as Eva Longoria arrived in a green carriage pulled by two black horses.

The TV and movie star dazzled onlookers in a Dolce and Gabbana black minidress, white Jasmine di Milo coat and stilettos by Christian Louboutin.

However, the event was disrupted by a group of around 15 anti-fur campaigners, shouting "Shame on Harrods" for its acceptance of fur in its fashion departments.

Speaking after the event, the actress insisted she was still a bargain-hunter despite her Hollywood credentials.

"I still can't bring myself to buy a 500-dollar cashmere sweater...I'm definitely a bargain-hunter when it comes to the New Year sales," she said.

The actress spent Christmas at home with her family in Texas and plans to see in the New Year with her fiance, basketball player Tony Parker.

One Harrods bargain hunter spent over £1,000 on three Gucci handbags. She asked only to be described as Jane because, "If my husband finds out, he will kill me."

She added: "The way I see it, three Gucci handbags will last me a lifetime...probably."

The best buy was said to be an LG 60in plasma screen TV, which was reduced from £8,495 to £5,495. A Sony Bravia 46in LCD TV with a free DVD recorder was down from £2,200 to £1,599.

The store has switched away from its policy of offering high profile loss-leaders, such as £4,000 plasma TVs for as little as £100, after finding shoppers were becoming too excitable in their race to the tills.

A spokesman said: "We are not doing the loss-leader sales any more for the sake of our customers' and staff safety."

The survey by Direct Line estimates that the pot of money to be spent on the sales this month is £5.5 billion - up by 50per cent on last year.

It makes the point that part of this pot comes from gift vouchers - £73 million. Regardless of when the vouchers were bought, they will not be spent - handed over in exchange for goods - until January.

The fact that many are being used in the sales means the value of the goods purchased will be much higher than when the vouchers were first bought.

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