Comment: British shoppers rewrite the rules

And how, after the Christmas splurge, is the health of the Great British Consumer? Mixed messages have been coming from the sales, about the state of demand and, more interestingly, about shopping habits. A word about the state of demand first.

Yes, it has been a good Christmas for virtually the entire retail sector. There have been individual disappointments, which have been reflected in the main stores' share price movements over the past few days. As a rule of thumb the retailers that were most damaged by the recession - companies like Next and Burton - seem to have had a rather better Christmas than those that sailed serenely though the difficult period - companies like Boots and Marks & Spencer. But that may reflect, respectively, over-pessimistic and over-ambitious market expectations, rather than any real triumph or disaster on the high street.

What does seem clear is that the immediate post-Christmas period was extraordinarily buoyant, and the first week of January was fine. It is too early to have much feel for the most publicised sale, at Harrods, but that is an unusual market with a high proportion of foreign buyers. For the broad mass of shops it looks very much as though the funds set aside for Christmas shopping were merely held over until the sales, so that the overall demand for the entire last quarter of the year will be only slightly up in real terms on last year. The good Christmas and the excellent sales were really compensation for a very weak run-up.

DOG DAYS

Looking ahead, retailers are also concerned that demand may now flop back. To judge by the quiet conditions in Oxford Street in London yesterday, the dog days may have already arrived, but of course no one will be able to make anything other than an impressionistic judgement of the whole period until the end of January. Indeed the wiser retailers would like to see how February and March turn out before they make judgements about the sales. Maybe not just Christmas savings are being spent: maybe shoppers have brought forward future planned purchases to take advantage of the low prices.

So the overall message from the retailers is that things are all right so far. The success of the sales means they will have cleared out much of the more tired stock and can start filling the shelves and racks with the new lines. New products do attract shoppers, so there is that to look forward to, but no one is expecting a particularly thrilling spring.

The sales are, however, a clear sign of a change in shopping habits. Sears, for example, finds that men's suits have been particularly successful. People have to have them, and evidently are not going to let such an opportunity pass them by. Toys are still selling well, which would have been unheard of after Christmas 10 years ago. All this suggests that shoppers have become extremely sensitive to price, or rather to bargain opportunities. In that regard Britons may well be becoming more like North Americans. While a few people will always see shopping principally as a recreation, most North Americans have a more utilitarian approach. They are driven more by the thirst for the deal than the carrier bag the purchase comes in; and maybe more for the intrinsic quality of the product than the label.

This raises two main questions for the months ahead. Are we already beginning to see how the latter 1990s will be different from the 1980s? And how can retailers benefit from changes in society's shopping habits?

As far as the first question is concerned, these Christmas sales are the first for perhaps 25 years to occur against a background of low current inflation and muted inflationary prospects. If inflation does remain low through the 1990s, and that is surely likely, then it is plausible that they are giving a taste of things to come. In a period of low inflation it is more important to get a good price, for inflation will not, so to speak, 'bail out' a bad purchase. It is also possible to save before buying a product, without running the risk that by the time the money is saved the price will have risen sharply.

Couple these factors with the current adverse publicity being met by the credit card companies. There is much greater pressure on the consumer to save before buying something and then use the fact that he or she is a cash purchaser to extract the best deal. It is almost as though the rules for shopping are going back to those of the 1950s - but with the difference that consumers are now vastly more self-confident.

BRAND NAMES

This new self-confidence could seem a problem for retailers, but in reality it will create opportunities. If there is a greater market for no-frills discount shopping, then the retailers should supply it. One of the big differences between North America and the UK is the relative paucity of shops where brand names can be bought for substantially less than their regular department store prices. There is a small discount food sector, with stores like Food Giant, but no real equivalent for other branded goods. Expect these to develop.

Brand owners will have mixed feelings, for they are always concerned about diluting their image. In many cases nowadays the brand is the store itself, but where a brand does not own any retail outlets discount stores enable it to reach a different market. Ultimately the growth of discount stores could enable brand owners to fight back more effectively.

Looking ahead, if the 1990s are going to be a tougher time for retailers, at least they have a capability now that they did not have 10 years ago. New electronic till systems tell them vastly more about which goods are selling and which are not.

The task is to apply the knowledge more effectively, using it as a tool rather than a straitjacket. It ought to be possible for a group to meet the needs of different types of shopper, both as to the product lines and the levels of service required, because the retailer does now know almost immediately what the customers are buying.

So the message from the sales - that if people are offered genuine bargains they will beat a path to the door - is already being talked about in the boardrooms of the retail groups. Expect the retailers to try to imitate the conditions of those sales for the other 11 months of the year.