WRAPUP 1-UK retailers predict a bright Christmas

* Tesco expects biggest-ever Christmas

* Dixons Retail sees strong new technology sales

* CBI sees tougher retail sales in New Year

By Mark Potter and James Davey

LONDON, Nov 25 (BestGrowthStock) – British retailers are gearing up
for bumper Christmas sales, with the country’s biggest
supermarket group Tesco Plc (TSCO.L: ) predicting its best ever
festive season.

The cheery note follows recent upbeat outlooks from
retailers including Britain’s biggest department store group
John Lewis [JLP.UL] and discount store Poundland.

“We’re backing Christmas. We believe it will be our biggest
Christmas yet,” Tesco’s commercial and marketing director
Richard Brasher said on Thursday at a store in north London.

Tesco is setting aside 5 percent more selling space for
seasonal products ranging from artificial trees to a Virgin Mary
children’s costume at its 220 Extra stores, which account for
about 50 percent of its UK revenue.

British retail sales growth picked up in November, and a
survey by the Confederation of British Industry (CBI) showed
retailers expect demand to hold firm in the crucial Christmas
shopping season.

Europe’s No.2 electricals retailer Dixons Retail (DXNS.L: )
hopes demand for iPads, motion-sensitive gaming systems and 3D
TVs will offset the impact of government cost-cutting measures.

“It is clear to us that new technology sales will be strong
(at Christmas),” Chief Executive John Browett said, after the
company posted an expected narrowing of first-half losses and
said its recovery strategy was on track.

“However, the key question is how much of that substitutes
for other expenditure in this kind of environment? We are not
expecting an easy Christmas, we think it is going to be very
competitive,” he said.

Many of Europe’s retailers are still struggling with
consumers’ reluctance to spend on big ticket items as
governments cut spending and raise taxes to reduce huge
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Tesco forecasts best ever Christmas [ID:nWLA9100] Dixons pins hopes on technology to offset cuts [ID:nLDE6AM0QW] UK retailers confident of strong Xmas -CBI [ID:nLDE6AO0YK] Reuters Insider show on http://link.reuters.com/quj96q Poundland on track for "best ever" Christmas [ID:nLDE6AL1CT] John Lewis raises Christmas sales forecast [ID:nLDE6A01DR] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


The CBI’s distributive trades survey said the balance of
retailers reporting an increase in business rose to +43 in
November from +36 in October. That was just short of September’s
six-year high of +49 and 10 points above the consensus forecast.

And John Lewis reported sales were up over 12 percent in the
first half of the current trading week.

“On the face of it, the CBI survey and the John Lewis
figures suggest that the key Christmas period is shaping up
pretty well for retailers,” said Howard Archer, an economist at
IHS Global Insight.

Retailers were confident the improvement would continue,
with an expected balance for December of +45. However, a rise in
VAT sales tax at the start of 2011 might rain on the parade.

“Looking into the New Year, retail sales growth may lose
some of its sparkle, as consumers rein in spending after
Christmas,” said Ian McCafferty, CBI chief economic adviser.

“Confidence remains fragile, VAT is rising in January, and a
combination of weak wage growth and high inflation is eating
into household incomes.”

A quarterly survey of retailers showed stores were slightly
less upbeat about the future than they were in August, with the
business situation balance easing to +11 from +22.

Tesco’s big push in festive products — from perfumes and
pyjama gift sets to computer games, toys and tablet computers —
could turn up the heat on high-street chains such as Home
Retail’s (HOME.L: ) Argos, Alliance Boots and HMV (HMV.L: ).

Tesco saw a 20 percent rise in sales of non-food Christmas
products last year, and Brasher said it had bought in up to 20
percent more goods in some product categories, signalling it is
expecting more big gains in market share.
(Additional reporting by Kate Holton, writing by Alexander
Smith; Editing by Will Waterman)

WRAPUP 1-UK retailers predict a bright Christmas