The director general of the British Retail Consortium (BRC) has admitted that early indications show this year’s Christmas trading results “won’t be pretty”.

With the global credit crunch beginning to take hold, many shoppers appear to have cut down on their festive spending and numbers on the high street – as well as their average spend – seems to be falling.

And despite the government’s attempts to stimulate spending with a VAT rate cut at the beginning of December, BRC director general Stephen Robertson said he expects the Christmas shopping figures – to be published in full on January 13th – to be “poor”.

“We’ll see the full December figures in a few weeks, but they won’t be pretty,” he said.

“Despite a last minute surge, it’s becoming clear that overall this has been a poor Christmas for retailers, as struggling customers cut back and traded down.

“Few retailers have not been hit by the slowdown but some harder than others.

“Some online retail operations have seen strong growth; food sales will have outperformed non-food – though all customers bought more carefully with ‘value’ the watchword.”

Mr Robertson also said the “unprecedented scale” of discounts and promotions in the run-up to Christmas, combined with the weak sales numbers, “have put margins under severe pressure”.

“All retailers are looking to sharpen their performance to make sure every part of the business can meet changing customer needs as efficiently as possible,” he continued, before criticising elements of government policy.

“Government must recognise that every extra tax and regulation has an impact on prices, under-pressure customers and retailers.

“There’s no case for huge business rate increases, a costly supplier ombudsman or bans on alcohol promotions.

“And remember, retail employs three million people, more than manufacturing. Increasing National Insurance, a tax on jobs, is particularly unwise.”