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It’s beginning to look a lot like Christmas

There’s been much frothing about the earlier-than-ever appearance of department store Christmas shops, as though there is something faintly indecent about thinking of the festive season before the summer holidays have even finished.

Maybe in a ‘normal’ year there might be some justification for that sentiment but, at a time when retail is facing its second VAT hike in 12 months, shops have every reason to concentrate on the run-up to the New Year.

After all, we face not a 2.5% increase in January but a 14.5% increase in the amount of tax being taken. And the last one was even bigger, at 15.7%. There was a clear pre-VAT sales bump at the end of 2009, particularly in big-ticket items, and there is every reason to expect another as 2011 approaches.

The second and third trading quarters have been marked by erratic trading, for independents at least, as the new Government and its radical plans have generated a shock wave of uncertainty in the economy. The BHF-BSSA quarterly sales monitor shows fashion and footwear slid by about 1% in the second quarter to June 30. One fashion retailer said: “16% up in the first quarter, now 18% down in the second quarter. Business is an unpredictable roller-coaster. June was our worst month in seven years of trading - an absolute result of the Budget and the knock to consumer confidence.”

The survey also shows 56% of respondents expect the VAT increase to hit sales, and those reporting they are “anxious” about their trading future rose to 54%.

So retailers need to make hay while the sun shines - even if that means setting out the Christmas stall as early as possible. It looks like it might need to be Christmas every month from now until January.

In which case - Happy Christmas!

Alan Hawkins is chief executive of independent retail trade body BHF-BSSA Group

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