High Street stores have been experiencing a disappointing Christmas and have had to slash prices to tempt shoppers through the doors.

Consumers are very savvy, it's like a game of chicken between retailers and shoppers Alex Scott, Seven Investment Management

Even so sales are believed to be disappointing despite a last-minute rush on Christmas Eve.

Market analyst Footfall said the number of people at shopping centres was 7% lower than last year.

Analysts blamed the fall in shopping and spending on the uncertain economic climate and the prospect of a war with Iraq.

But some market watchers also suggested that shoppers had simply wised up to the retailers' tactics and were waiting for the sales before buying.

Christmas wish

Retailers can make up to 40% of their sales in the crucial Christmas trading period.

It really has been a big rush this time, but we've been ready for it Tesco

But David Smyth, Footfall's marketing manager said: "Retailers have been waiting for a last-minute shopping splurge but the Footfall Index figures indicate that their Christmas wish has not come true.

Footfall said its research suggested the pre-Christmas week in 2002 was the worst for three years.

Department store group Allders seemed to confirm the news this week, warning that sales in the 12 weeks to 19 December were 3% lower than last year.

'Playing chicken'

Alex Scott, an analyst at Seven Investment Management, said retailers' problems were compounded by shoppers holding off until there were price reductions.

"Consumers are very savvy.

Tesco opened at midnight to cope with demand

"It's like a game of chicken between retailers and shoppers."

But Mr Scott said retailers had little option but to give in first, rather than face being left with excess stock.

"It's better to get stuff out of the door rather than take a bigger hit in the new year."

Supermarket hit

Not all retailers were caught out, however, with supermarkets enjoying booming sales for the holiday.

A spokesman for Tesco told BBC News Online: "We've been busier than ever."

Tesco opened its doors at one minute past midnight at the start of the week, rather than at 8am, in a bid to cope with the flood of festive shoppers in its larger stores.

"We were busier at 4am than at 4pm," said Tesco.

The supermarket said it sold just under 2 million turkeys last Christmas but was on course for sales of 2.25 million this year.

"It really has been a big rush this time, but we've been ready for it," said the group.

Overall spending, however, is expected to be down on last year.

There is no doubt that retailers are feeling the pinch Tony Craze, Goy Harris Cartwright

Concerns about the job market and the global economy have made shoppers cautious and retailers are paying the price.

Mr Scott told BBC News Online: "There's an economic argument that consumers are up to their eyes in debt and becoming less confident about the future."

However, Mr Scott said that with interest rates and unemployment levels so low, there was little reason for shoppers to feel pessimistic.

"They're actually in a good position," he said.

Crisis of confidence

The danger is that well-publicised concerns over the economy become a self-fulfilling prophecy.

Recent consumer confidence reports have suggested that shoppers are unlikely to dig deeply into their purses until they have a clear indication that things are improving.

The British Retail Consortium's latest report showed a fall in consumer confidence to 20 December, which the BRC described as a "disappointing result" so far into the traditional Christmas spending season.

Research group Martin Hamblin Gfk published its consumer confidence report earlier this week, suggesting that 45% of those surveyed expected the economic situation to get worse in the next 12 months.

Tony Craze from the stockbrokers Goy Harris Cartwright told the BBC Radio 4's Today programme:

"There is no doubt that retailers are feeling the pinch."