Debenhams sees record December sales

Branch of Debenhams in Liverpool Debenhams said trading in the last few months of 2012 was "extremely challenging"

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Department store chain Debenhams has reported record December sales, thanks in part to additional promotions.

Like-for-like sales rose 5% in the month against a year earlier. Sales in the 18 weeks to 5 January were up 2.9%, with online sales up 39%.

Despite the strong sales, the group warned there would be little upturn in consumer confidence this year.

Earlier, figures from the British Retail Consortium (BRC) showed a 0.3% rise in December retail sales.

It also said there would be little improvement in sales in 2013.

'Best ever'

Debenhams said the trading environment in the last four months of 2012 was "extremely challenging".

"We continue to believe that whilst consumers have become acclimatised to the new economic reality, we don't anticipate a significant change in consumer confidence in the remainder of the year," said chief executive Michael Sharp.

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With shoppers leaving it late to buy presents this year, the chain said it increased promotional activity in the run-up to Christmas.

As a result of this additional discounting, profit margins would be lower than previously forecast, it said.

This, together with the downbeat comments about the year ahead, pushed Debenhams shares down 7.7% on Tuesday.

Department stores performed well over the festive period. On Monday, House of Fraser said it enjoyed its "best ever" Christmas, with like-for-like sales, which strip out the impact of new stores, rising 6.3% in the six weeks to 5 January.

Last week, John Lewis also reported a sharp rise in Christmas sales.

Others on the High Street fared less well. The BRC said that, after allowing for inflation, overall sales were flat in December, which, together with rising costs, meant retailers were "running fast to stand still".

Retailers endured a tough year in 2012, with a number of high profile High Street names going into administration, including Peacocks, Game, Aquascutum, Clinton Cards and Comet.

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