British music and book store HMV Group reported strong Christmas trading today to dispel fears that piracy would hit sales of DVDs and worries of a poor holiday sales period for booksellers.
The firm said group sales, stripping out the effect of new and closed stores, rose 6.4 per cent in the 5 weeks to January 8th - more than double analysts' expectations of a 2 to 3 per cent rise.
HMV, which also owns the Waterstone's book chain, said sales were led by CD albums by Irish rock group U2 and New York band Scissor Sisters, the Little Britaincult UK comedy DVD and the Himalayatravel book by former Monty Python member Michael Palin.
"Whilst trading at Christmas was strong, we take a cautious view of the outlook for the UK consumer economy but expect it to prove sufficiently resilient for us to meet our financial targets for the full year," the firm said in a statement.
British consumers have been reining in their spending as a series of interest rates, worries about pensions and a cooling housing market begin to bite.
HMV said it would accelerate the return of cash to shareholders through an increase in the dividend and a programme of share buy-backs "as and when appropriate".
The company reported pre-tax profits for the 26 weeks to October 23rd of £13.3 million sterling, up nearly a quarter on the year-ago period and in line with analysts' expectations.