XMAS Retail Survey

LONDON (Reuters) - Bargain-hunters look to have rescued the country's retail chains from a dismal Christmas sales performance, according to a survey, but stores may have paid a heavy price to clear their shelves.

FootFall, a company that monitors the number of shoppers walking in and out of shops across the country, said on Friday shopping traffic had surged 8.6 percent on Thursday -- Boxing Day -- the first day of the heavy discounting that typically follows Christmas Day.

FootFall said the swarms of bargain-hunters had given retailers an 11th-hour boost after its monitors recorded an 11.3 percent fall in shopper numbers on Christmas Eve compared with the same day a year earlier.

"The figures for Christmas Eve are bad news for retailers as the slump that has been reported in the build-up to Christmas continued right up to the last day," FootFall said.

It said Thursday's heavy traffic confirmed earlier predictions that consumers would wait for the discounting to start before opening up their wallets and purses.

FootFall, which began counting shoppers in 2000, employs monitors to stand outside 100 shopping centres across the country. It says the centres contain more than 5,000 stores and serve about a quarter of the British population.

FootFall's figures are another sign that stores are sacrificing profit margins as they race to clear stock. Stock market-listed retailers are also eager to boost their revenue figures before they are due to update investors on Christmas sales next month.

FootFall said shopper numbers in the week before Christmas and during the weekend before Christmas were down 7.2 percent and 7.5 percent, respectively.

"Now prices have been slashed as the sales start, it will be interesting to see whether this massive increase in the number of shoppers on Boxing Day will continue over the course of the first week of the (post-Christmas) sales," it said.

Analyst Richard Perks, of retail consultancy Mintel International, agreed that sales growth had been weak running up to Christmas, at around two to three percent compared with growth of six to seven percent last year.

"There was definitely a slowdown over Christmas," Perks told CNBC television, adding that aggressive discounting in the days after Christmas was unlikely to save the day for retailers.

"There's a lot of stock hanging over, and retailers have just got to get rid of it," he said. "They have to clear it out and that means low margin."

"It's not been desperately bad from a historic perspective but much worse than the recent ones we have had," he added.

On Thursday, Arcadia, a major British clothing chain rivalling Marks and Spencer Group Plc, predicted a flat underlying sales performance over Christmas, according to a report in the Daily Telegraph newspaper.