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High Street Could Lose Xmas Shopping 'War'

(c) Sky News 2012

Fears that consumers are reining in their spending ahead of Christmas were fuelled after the latest retail figures showed a 0.1% rise in retail sales in November (Xetra: A0Z24E - news) .

It comes after a much worse than expected drop in October when retail sales volumes fell 0.8% month-on-month.

Household goods showed their strongest monthly rise since 2010, mainly driven by tablet computer sales.

Across all retailing, an estimated £7.3bn was spent weekly in November, around the same as last year.

But, despite the small increase, the Federation of Small Businesses (FSB) has urged shoppers to support independent high street retailers - or risk losing them for good.

For the FSB, it is a case of "use them or lose them".

It said the small shops are being swallowed up by the aggressive dominance and predatory pricing strategies of supermarkets, which for example can offer free parking to their advantage.

The FSB also blamed spiralling VAT and rents and, on many streets, increasing business rates. 

It added the Valuation Office Agency's (VOA) appeals process for business owners and tenants seeking rate relief is too slow and that some are forced to wait years.

According to the Competition Commission, since 2000 there has been a steady growth of 3% in new supermarkets owned by the UK's five largest retailers.

But, in contrast, the All-party Small Shops Group warned, should the present rate of decline continue, most of the UK's smaller retailers could be forced to close by 2015.

In its 2008 report, the Parliamentary Enterprise Group repeated that warning. 

Meanwhile, global information and insights company Nielsen has said the UK's leading supermarkets will be relying on strong advertising in the final weeks of Christmas after the slowdown in sales last month.

It said the end of November saw a significant increase in TV and Press advertising, particularly around wines, spirits, beers and seasonal products ahead of Christmas.

During the four weeks ending December 2, Tesco (Other OTC: TSCDY - news) was the highest spending supermarket on TV and Press at £11.8m, just ahead of Asda at £11.2m, then Sainsbury (LSE: SBRY.L - news) £7.3m and Morrisons £7.1m - all figures lower than at this stage last year.

Nielsen's UK head of retailer insight Mike Watkins said: "Because shoppers are planning visits to take advantage of the many offers available this year we, therefore, expect continued use of media spend across all channels in the next few days to encourage them into store and to buy any remaining indulgences at the same time."

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