PRICE slashing in the face of the credit crunch has helped some of the Capital's leading department stores record a big increase in sales. John Lewis said customers' hunt for bargains has helped continue its strong Christmas trading growth into January, with sales well above last year.
Meanwhile, Jenners said the sales and its £4.5 million refit have both contributed to a strong Christmas trading performance.
House of Fraser and Harvey Nichols also reported good trading, despite consumer caution on spending.
Despite the new y
ear sales boost, though, retailers warn that heavy discounting will mean the profit margins of almost all retail companies will be significantly below last year.
They fear that, in turn, will lead to more city centre firms going out of business within the coming months.
The John Lewis store within the St James Centre saw sales rise by 10.2 per cent in the week to January 3, compared to the same week last year.
The growth has continued into the current week to today, with sales again approaching double-digit growth compared to the same week last year.
Andrew Murphy, managing director of John Lewis in Edinburgh, said: "We thought we'd have a strong finish to December because customers usually do manage to pull it out of the bag for Christmas, but we expected sales to return to the steep decline of around October this month.
"But we are back up at growth, helped by the strong mix of bargains and new season stock."
But he warned: "In the next six months, the killer question for retailers is not how much sales are growing or falling, but rather do you have enough cash flow in the business to sustain yourself and be profitable.
"In Edinburgh, we are very fortunate to live in a strongly growing city region economy, but there have never been as many threats as there are now."
George Bell, store manager at Jenners, said: "This has been a very challenging year for retail, but footfall and sales reflect a great Christmas trading period for Jenners."
Parent company House of Fraser has said group sales in the five weeks to January 3 were up 4.5 per cent on the same period of last year, and Harvey Nichols in Edinburgh recorded a strong finish to 2008, with the final week well up on last year.
Despite this, Fiona Moriarty, director of the Scottish Retail Consortium, warned:
"The next few months will be crucially important for all retailers. Undoubtedly there will be casualties, but as long as retailers are willing to provide value they will be able to weather the current downturn."
