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Brand image set to be key for Christmas shoppers

Brands and retailers that hit the sweet spot between perceived value and quality will be the big winners this Christmas.

Barbour, Ted Baker and Victoria’s Secret have been identified by a new report as among those likely to succeed during the festive season, as customers look to invest in fewer items of good quality when selecting presents.

Brits are expected to spend £86bn throughout the festive season this year, a rise of 1% on last Christmas. This marginal increase is being driven by a rise of prices, with a report by Verdict Research and business analytics software firm SAS forecasting a drop of 0.2% in volume sales over the period.

The clothing and footwear sector will outpace the retail average, climbing to £14.9bn, a rise of £400m or 2.75% on last year.

Mintel has also predicted a growth in spending, with the research company forecasting a 3% growth in retail sales in December.

After holding back last year, the report predicts shoppers will splurge on occasionwear for themselves, with retailers such as Reiss, Topshop and Zara expected to do well as a result.

Country chic is also tipped to grow in popularity, with key styles including tweed tailored jackets, quilted coats, and designer wellies.

“Brands such as Aubin & Wills, Hunter, Joules, as well as the likes of H&M and Zara, perhaps more affordable, are driving the trend,” the report said.

However, discounting will continue to be a major factor in attracting customers in the run up to Christmas, with “department stores leading the way with regular Blue Cross Sales and One Day Spectaculars”, the report added.

“Consumers will remain reluctant to purchase items at full price in the knowledge that retailers will be forced into discounting, leading to a period of uneven trading driven by shopper reaction to markdown.”

Christmas could be tough for stores on the high street as shoppers search for convenience, competitive pricing and quality products at etailers, department stores, supermarkets and discount stores.

Online sales are forecast to amount to £31.2bn in 2012, compared with £27.1bn last year. The number of people using tablets is also expected to rise, and drive sales incrementally.

Cindy Etsell, head of retail at SAS UK & Ireland, said: “Click and collect and m-commerce will be particularly attractive for the time-pressed over Christmas. And, while spend is up, volume is down and so discounting is expected to be a big part of retailers’ strategies. The combination of multi-channel shopping and heavy discounting will increase competitive pressure.”

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