A downturn in Christmas sales could prove disastrous for many high street stores as some depend on the Christmas season for a third of their annual sales. Many are offering 20% to 50% discounts. Some London West End stores have tried opening their doors as early as 7am to try and entice people on their way to work. Others tried to encourage shoppers by passing on the 2.5% reduction in VAT before the lower rate came into effect on 1 December (The Times Online, 29 November 2008).

The run up to Christmas has seen an extraordinary level of discounting and one-day special sales events. However, these promotions, coupled with the government's reduction of 2.5% on VAT (down to 15%), have yet to show a boost in shopper numbers or higher consumer spending.

According to Hitwise, an Experian company, offering a credit monitoring service,  consumers have been looking online for bargains. UK internet searches for discount vouchers increased by 133% over the last 12 months. Visits to voucher websites have risen by 45% as bargain-hunters search for discount vouchers to help them save money online and on the high street. Predictions were that the UK would have its busiest internet shopping day of the year on 9 December 2008, with £320 million forecast to be spent online. (BBC website 9 December 2008).

Businesses have been looking at a variety of marketing promotions to try to address the issue to increase sales. Marks and Spencer has offered a novel discounting opportunity last month with its first one-day sale for four, cutting prices in its clothing and homeware departments. It has a number of partnerships with charities, including the M&S/Oxfam Clothes Exchange, an enterprise which invites consumers to take their old clothes to Oxfam where they will receive a £5 voucher to use next time they spend £35 or more on Clothing or Home and Beauty at M&S.

Other companies, such as Littlewoods Direct, are offering three for the price of two on many products and PC World is offering free laptops with various broadband connections as well as special TV offers. Special offers and free deals are just some of the ways retailers are attracting customers to buy goods.

Read The Times 100 case study on Wilkinson to see how it has looked for new ways to grow its business. This included targeting new markets and developing a new marketing strategy with an online shopping service in order to be more competitive.