Two more British retailers from opposite ends of the spectrum have reinforced evidence that British shoppers remain keen to spend.

Discount group Matalan, which has generated a breakneck performance over the past few years, said its trading in the five weeks to 5 January 2002 was up 31.7% on the same period last year.

On a like-for-like basis, which compares sales only at stores open this time last year, the retailer's sales grew 9.2%.

Meanwhile, luxury clothier Austin Reed saw its sales for the same period rise 6% on a like-for-like basis and 7% overall, a better performance than analysts were expecting.

For the 21 weeks to 5 January, Austin Reed revenues were up 3% and 2% like-for-like, while Matalan's were 34.6% higher, or 6.9% like-for-like.

Back from the dip

For Matalan, the figures mark something of a return to form after an update on trading in October which had sector watchers worried.

At that point, the West Lancashire-based firm said like-for-like growth in the first nine weeks of the second half of this year was just 5.2%, down from 10% during the previous year thanks to cannibalisation of sales from old stores by new ones.

The company also lost its chief executive, as its share price more than halved from a high of 800p.

Still, the concern remains that margins - the ratio of profits to earnings - have slipped as a result of discounting that was even heavier than usual and a move in the pattern of sales towards slimmer-margin homeware from more profitable clothing.

Some analysts said they were considering downgrading their profit predictions as a consequence.