High street wins battle for Christmas pound

News of modest but significant increases in like-for-like sales over the festive trading period delivered a note of optimism to the high street retailers.

Late night operator Urbium is the latest company to release positive figures, revealing a two per cent sales increase to December 31.

This falls in line with figures for Barracuda and Inventive Leisure, which both showed sales increases over 2 per cent. Troubled group SFI also revealed a one per cent rise in sales.

In a further vote of confidence Panmure Gordon analyst Douglas Jack increased target share prices for all high street groups this month, although clients were advised to hold on Mitchells & Butlers (M&B), and continue to sell JD Wetherspoon stock.

Nonetheless, M&B shares were pegged 30p higher and even Wetherspoon had its target price increased by 5p a share.

Mr Jack commented: "It supports our belief that High Street supply, demand and pricing is stabilising, with positive implications for Regent Inns, Luminar, Urbium and Restaurant Group."

Nick Morgan, finance director at Barracuda, said: "The figures were pretty good and we were quite surprised as we effectively lost two key trading days because of the way Christmas and New Year's Day fell on Saturdays."

This up-beat outlook was in stark contrast to very mixed messages from the high street shopping sector, which, according to the CBI, relied more heavily on discounting to entice customers through the door. Moves to curb heavy discounting and improve on the quality of the offering among the high street drinks retailers appears to be paying off.

Mr Morgan continued: "January will be tough. But because we don't go driving sales through discounting and will rely instead on tightly controlling our business, we expect to hold our own through the month."

At SFI, finance director Mark Robson cited strong food performance as the key to the company's modest upturn in sales. "We expected a dip with the loss of trading over Christmas and New Year, but sales were surprisingly healthy," he said.

If the high street headed off a potential slump over the period, then many neighbourhood and rural operators faired even better. Nigel Wright, managing director of the 50-strong Pioneer Pub Company, reported a five percent like-for-like increase in sales during December.

"The first three weeks of December were worryingly slow," he said. "Then business took off between the 20th and New Year's day, especially in our rural sites." Mr Wright revealed that extended families were attracted into his food-led pubs due to the length of the bank holiday periods.

A word of caution, though, was sounded by Simon Townsend, operations director of Enterprise Inns. "It is still too early to tell how good trading has been over the period because the real test is the combination of Christmas, New Year and the January period which follows," he said.