According to findings by the American Express 2007 Retail Monitor, nearly half (46 per cent) of retailers said sales this year would be better than last - a similar level of optimism compared to last year, whilst 52 per cent (up four per cent from 2006) think sales will be the same. Only two per cent predict that holiday sales will be worse than last year.
The results are part of the second annual American Express Retail Monitor, a barometer of business trends and issues affecting the retail industry within the UK and Europe.
The research underlined the economic importance of Christmas to UK retailers, with respondents expecting the festive season to account for 26 per cent of their annual revenues.
According to the survey, consumer sentiment appears to match retailers' positive outlook, with 88 per cent of UK Christmas shoppers planning to spend the same or more as they did on Christmas gifts in 2006. Although 12 per cent said they planned on spending less.
Overall, consumers planned to spend an average of £307 on gifts this year, while one in seven (14 per cent) were planning to spend in excess of £500.
UK retailers cited competitive pressures (74 per cent) as the most likely issue to affect revenue over the Christmas period. Other challenges identified were health of the economy (60 per cent) and consumer confidence (56 per cent).
In order to combat competitive pressures, UK retailers are turning towards new advertising methods, with new media (32 per cent comprising online advertising, search engine advertising and email marketing) replacing traditional TV and magazine advertising (28 per cent combined) as the vehicle that most UK retailers will use to steal the march on competitors. UK retailers reported they were twice as likely to advertise online (16 per cent) than they are on TV (eight per cent).