Price cuts 'won't boost retailers'

But the heavy discounting - including cuts of up to 70% - might not be enough to boost the ailing retail sector, analysts have warned.

Across Britain, department stores and shopping centres on Friday reported throngs of eager bargain hunters - on London's Oxford Street some even braved the cold at 2am to secure a pole position outside Selfridges.

However, with retailers slashing prices, a greater footfall might not equal a greater profit, analysts warned.

Jonathan de Mello, director of retail consultancy with business analyst Experian, said the overall picture might not be as positive as retailers were making out.

He said: "It looks very strong with queues out the door in all the big stores and shopping centres but it could have been better and might actually be worse than last year.

"Christmas Day was very good for online sales, and many people were shopping online instead of venturing out yesterday. Even if footfall is up on last year because of the big reductions and discounts, footfall would actually need to double because the profit margin is lower."

Some of the high street's big names begin their sales on Saturday including John Lewis and Marks & Spencer which is opening some stores at 6am and promising discounts of up to 50%.

Stephen Robertson, director general of the British Retail Consortium, was pessimistic about how successful the sales would be. He said: "We'll see the full December figures in a few weeks, but they won't be pretty.

"Few retailers have not been hit by the slowdown but some harder than others. Discounts and promotions on a scale unprecedented for the run-up to Christmas, combined with weak sales, have put margins under severe pressure."