In a first for the near-150-year-old retailer, John Lewis said yesterday that four weeks of £100m-plus sales had put it on track for a “vintage year” as shoppers defied the deepest recession since the second world war.

There is expected to be more good news from Next this morning, followed tomorrow by Marks & Spencer, which is expected to report its first sales rise in two years. Sainsbury’s follows on Thursday.

“John Lewis is definitely one of the Christmas winners,” said its director of selling operations, David Barford. “We have never achieved this level of trading in December before. People can only take so much bad news and this Christmas they wanted to shop.”

However, some analysts warned that part of the boost to sales came from shoppers bringing forward spending on big-ticket items such as televisions before the new year increase in VAT.

John Lewis, which includes the Waitrose supermarket chain, has fired the starting gun on the retailer reporting season. The three-month period that contains Christmas is known as the “golden quarter” because retailers make most of their profits during the key trading weeks.

Analysts said John Lewis had set the bar high for quoted rivals by racking up like-for-like sales growth of 12.7% in the five weeks to 2 January. Compared with two years ago, when consumers were still reeling from the collapse of Northern Rock, like-for-like sales were ahead 10.4%.

John Lewis’s managing director, Andy Street, said its previous record, set in December 2007, had been broken in the week before Christmas, when its tills rang up £112m. The bonanza continued after Boxing Day, with sales in the first week of its clearance surpassing £100m.

The department store group said sales were strong across the board, with fashion and beauty up 22%, and home furnishings and technology up 19.6% and 11.4% respectively.

The lead-up to Christmas had been an anxious time for the partnership’s 69,000 employees as profits at John Lewis plunged 49% on a gloomy high street. The cooperative structure means staff receive a bonus calculated as a percentage of their salary. Last year the payout was cut from 20% to 13% – the equivalent of nearly seven weeks’ pay.

However, John Lewis has more than made up ground lost in the first six months, with sales now higher than a year ago, while Waitrose is the country’s fastest growing supermarket with like-for-like sales up 9% in the past 13 weeks.

Analysts said December sales were buoyed by a “last hurrah” as shoppers made the most of the final days of the lower VAT rate. The next government, whatever its complexion, is expected to usher in an era of higher taxes; in a weekend interview, shadow business secretary Kenneth Clarke did not rule out fiscal tightening, and some commentators are predicting that a Conservative government would lift VAT to 20%.

While John Lewis has prospered, footfall figures from Synovate estimate that shoppers’ numbers were down 5.5% over the key five-week period. Synovate analyst Tim Denison said the figures were weaker than expected amid less “casual” shopping. “The people who went shopping went shopping for a reason,” he said. “We think there was less gift buying, with more people out shopping in the sales.”

The early signs are that while consumers may have had fewer nights out over Christmas, they were prepared to spend more on enjoying themselves at home, with John Lewis reporting strong demand for home furnishings as people “dressed” their houses for Christmas.

All retailers are benefiting from weak comparisons after two tough years for the sector. However, store chains such as Next and M&S are seen to be emerging from the trough: Next chief executive Simon Wolfson is expected to report either flat or a modest decline in underlying sales this morning.

Analysts expect modest growth from M&S after a two-year hiatus, with Singer’s Matthew McEachran anticipating a 1% rise in what will be the last trading statement presided over by the executive chairman, Sir Stuart Rose, who will soon make way for the new chief executive, Marc Bolland.

Sainsbury’s boss Justin King is in the firing line on Thursday: the grocer reported slowing sales growth at its last quarterly update as food inflation dissipates. Rival Asda has already said it had a “solid” Christmas.

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Consumer spending during the final fortnight of December was 2.4% higher than in the same period of 2008, according to card processing firm Barclaycard Payment Acceptance.

The group, which processes credit and debit card transactions for 88,000 UK retailers, said consumers spent £4.09bn on their cards between 19 and 31 December, up from £3.99bn on 2008. The busiest day was 23 December, when £497m was spent on last-minute Christmas shopping.

Following reports of long queues in the small hours of Boxing Day outside shopping centres, the card processor said post-Christmas spending was also up on 2008. As shoppers rushed to the sales, spending totalled £1.68bn, up from £1.64bn in 2008. Tuesday, 29 December was the busiest day post-Christmas, with transactions adding up to £376m.

On Christmas day this year many people turned to their computer screens to continue shopping, with more than 700,000 transactions worth £24m processed, peaking at 12.08pm when 32 transactions a second were being handled. Online retailers accounted for £9.5m of turnover on Christmas Day, up 17% from £8.1m in 2008.

Retail experts have said that while shops appeared busier this festive season, consumer confidence is still fragile thanks to high unemployment and wider economic problems. The latest data shows the UK is still mired in its deepest recession since the second world war.

Much of the December sales rush has been attributed to shoppers racing to beat the rise in VAT, which yesterday went back up to 17.5% from the government’s emergency rate of 15% over the last year.

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Encouraged by an imminent VAT rise, the fact that Boxing Day fell on a Saturday and promises of record-breaking bargains, shoppers were already lining up in the small hours of Saturday and the rush continued on Sunday as big chains such as Marks & Spencer waited to kick off their sales.

Online stores reported another Christmas surge but yesterday it seemed many bargain hunters still preferred to hit the high street. Queues quickly formed outside shopping centres, parched shoppers packed out high street coffee bars and cars snaked out of overflowing car parks up and down the country.

In Manchester, the city centre was bustling despite driving rain. A woman struggling through the downpour with a large M&S bag and several other bulging carrier bags said: “It is a nightmare out there.”

Many stores exploited the huge demand for discounts from cash-strapped consumers by opening their doors at 6am on Boxing Day, when they were not restricted by Sunday trading laws. In Milton Keynes shoppers started lining up at 3am on Saturday and at the Braehead shopping centre in Glasgow car parks were also filling up in the small hours. The sales rush continued yesterday, although big stores could not open for as many hours.

Gordon McKinnon, director of operations at Manchester’s Trafford Centre, said 150,000 people visited on Boxing Day and yesterday 20,000 people arrived before the noon opening time. But he was angry that opening was restricted to just six hours. “It is going to be much worse in 2010 when Boxing Day falls on a Sunday,” he added. “The frenzy of [Saturday] will be concentrated into just six hours.”

Laurence James, store manager at Kendals department store in Manchester, said Boxing Day had been hugely successful, with menswear in particular selling well, and that they had traded for 11 hours. “We were up 20% on Boxing Day last year,” he said. “We are expecting today to be down on last year because it is a Sunday. I expect Monday is definitely going to be the busiest shopping day of the year.”

More than 1,000 shoppers queued up at at thecentre:mk in Milton Keynes yesterday morning for the start of the John Lewis and Marks & Spencer sales with around 15,000 people flooding into the centre before tills opened at 11am.

The centre director, Robert Goodman, said many retailers were reporting double-digit sales growth. But he added a note of caution about darker winter weeks to come. “There is no doubt in my mind that the New Year sales will continue to attract shoppers on the lookout for bargains, but we are expecting a slower January and February across the retail sector as a whole after the sales end,” he said.

Shopping centres reported a big boost from shoppers who wanted to beat the imminent rise in VAT, which is going back up to 17.5% on 1 January from the government’s emergency rate of 15% over the last year.

Trevor Pereira, commercial director of the Capital Shopping Centres chain, which includes the Lakeside complex in suburban London and the Metrocentre near Gateshead, said: “Retailers are experiencing high demand for laptops, TVs, mobile phones and homewares. Winter coats, cocktail dresses, cashmere cardigans and jumpers and winter boots are also proving popular sales items.”

But some shoppers were disappointed at their rewards for braving the bedlam. “There have not been massive discounts,” said Bill Hamilton, from Worsley, Greater Manchester. “A lot of stuff in the sales is not that reduced or seems to be the old tat they have rolled out again for the sales. I had been expecting more choice. I have just bought a pair of jeans because they were 40% off.”

Those opting for online shopping seemed happy to abandon family celebrations for a spot of retail on Christmas Day, making the most of an even earlier start to the sales on the internet. Department store chain John Lewis launched its online clearance on Christmas Eve and reported a record first three days with sales up 23% on a year earlier. It received an order every 10 seconds on Christmas Day, when the most popular purchases included guest beds and folding treadmills to work off the Christmas pudding. Boxing Day saw a record number of visits to its site.

The success added to a record Christmas for the John Lewis partnership’s Waitrose supermarkets as festive cooks splashed out on gourmet wares, lifting sales a fifth up on a year ago to £134.6m in the week to Boxing Day. Sales of three-bird roast (turkey, goose and duck) leapt 87%.

Large, out-of-town supermarkets also enjoyed a big jump on last year’s shopper numbers, with Tesco reporting a 50% rise to 1.4 million Boxing Day customers, who bought TVs at a rate of 35 a minute as well as toys, DVDs and other non-food items. Staple fruit and vegetables were in demand too ‑ Tesco sold 625 bananas a minute.

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Department stores

At Very.co.uk there’s an abundance of big name brands, with up to 75% off fashion, electrical goods, jewellery and accessories. Another online retailer, Littlewoods.com is also offering 75% off at the moment.

At Debenhams you can get up to 70% off online on selected items today, and the instore sale starts at 7am on Boxing Day. John Lewis’s sale starts online at 6pm tonight (Christmas Eve) and starts instore on December 27 from Midday.

Luxury stores

If you’re after luxury goods, Selfridges’ sale starts on Boxing Day, check their website for the opening hours of your local store. Then there’s Harvey Nichols who also go to sale on Boxing Day. All the stores are opening at different times so again, it’s best to check their website for your local one.

At Harrods you can shop the sale online right now and instore on Boxing Day when it’s open from 10am – 8pm. Liberty’s sale also starts on Boxing Day and is open from 10am-8pm.

Fashion

If fashion is your thing then eco-fashion retailer Ascension is offering 50% reductions online at the moment. For designer clothing visit matchesfashion.com where you can also get up to 50% off. Then there’s My-Wardrobe.com, where they are offering 50% off designer clobber right now.

Vintage retailer Rokit’s sale has already started and you can save as much as 50% off dresses and jackets and 30% off tops.

Several high street stores have already started their sales, among them Topshop (both online and instore) Dorothy Perkins, French Connection, Laura Ashley and Gap. Moneysavingexpert.com has a good list of places where sales have started.

Homewares

Heals online sale starts on Christmas Day for those who are bored with watching the telly presumably. Their instore sale starts on Boxing Day at the Tottenham Court Road branch in London and the Redbrick Mill branch in Leeds. Everywhere else, the instore sale starts on December 27.

At Ikea all stores except the ones in Cardiff and Belfast are open on Boxing Day for the sales. Check your local branch for opening times. Argos starts their sale online on Christmas day and instore on Boxing Day.

If you’re after more niche homewares (and garden stuff and toys) try Cox & Cox. Their sale starts at midnight on Christmas Eve with up to 60% off. Graham and Green have started theirs now and you can save up to 50% off. Few and Far, Priscilla Carluccio’s award-winning shop in Knightsbridge, starts its sale on January 2 and you can get up to 70% off furniture, lighting, accessories and clothing.

Books

For book lovers, we’ve found out that publishing house, Phaidon is holding a ‘New Year Warehouse Sale’ at the Phaidon store, 173, Piccadilly (opposite the Royal Academy). The sale will run for only ten days, starting on January 1 at 8:30am and running until January 10 at 7:00pm.

Perfume

For cheap deals on perfume, try The Fragrance Shop which has a huge sale online now and instore on Boxing Day.

We’ve barely scratched the surface when it comes to the sales this year. If you’ve spotted any shops offering serious bargains, please let everyone know about them in the comments section below.

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