27/10/2011 04:04 BST | Updated 26/12/2011 05:12 GMT

Christmas Sales To Rise By 1%, According To Report

Christmas sales in the UK are expected to increase by 1% - less than a third of last year's growth, a new report has predicted.

Internet retailing is set to play a crucial role in "propping up" retail growth over the festive season, research by online shopping comparison website Kelkoo showed.

Christmas sales are expected to rise by 1%, or £680 million, to £69.09 billion, compared with an increase of 3.2% last year, said the report.

Online sales will rise by 16%, or £1.88 billion, to £13.4 billion this year, half the rate of last year's growth, said Kelkoo.

Chris Simpson of Kelkoo said: "The peak weeks of Christmas trading are critical for retailers, as many will earn up to 50% of their profits during this period.

"Throughout the year, the retail sector is a major contributor to the UK economy, employing over 2.9 million people across nearly 290,000 retail stores and online businesses, and responsible for annual retail sales of £297 billion.

"The retail industry is seen by economists as a leading indicator of economic trends, and results this Christmas will prove vital in stimulating retail growth and aiding the UK economic recovery as a whole.

"The outlook this Christmas shows some signs of promise for retailers despite the harsh economic climate. Online spending is showing no signs of abating, and is mounting a real challenge to the dominance of the high street which, for third year running, is expected to see a decline.

"Internet sales across the UK are set to be more important than ever, with consumers spending record amounts online, and online commerce acting as the primary driving force for overall retail growth during the festive season.

"In the meantime, a climate of government cuts and economic uncertainty is likely to undermine consumer spending, meaning consumers will be as determined as ever to make sure they are getting the best prices, which could explain why we expect to see many of them head online for their Christmas shopping."