Dave Newman is stepping cautiously into 2011 after a disappointing Christmas

I have to say I'm glad to see the back of this festive period. I never like to admit when trade is slow, but this year it's been tough. I felt a lot of factors conspired against us. The full trading week run-up to Christmas gave everyone time to get to the multiples, and with the fear of bad weather people stocked up even more than usual. After Christmas, I found myself for the first time in nearly 20 years pouring away short-dated milk, a clear indication of how the grocery side of my business has slowed of late.

Fortunately, alcohol sales from Christmas Eve through the Christmas weekend saved the day, allowing us to trade just below last year.

The first week of the new year is usually quiet and an opportunity to take a breather. Not this year, though, because of the VAT increase. I spent hours changing prices and printing new shelf edges.

While I don't believe the VAT increase alone will make a significant difference to trade, it is all the other factors that together make me very cautious going into 2011. With fuel and energy prices on the increase, wage increases minimal for those who are employed, and the fear of unemployment for many, it all points to people's disposable income decreasing.

So what's the way forward? Tesco has clearly signalled its strategy, with a host of newspaper adverts promoting its 'Better than Half Price' lines. No doubt Asda and the rest will follow and we could see a price war, which at least means that I can take advantage of some rock bottom prices.

Offering value for money is the direction I will take in 2011 and, fortunately, my main supplier Booker has an extensive range of value lines with reasonable margins. I will place greater emphasis on these, but will still hopefully retain some margin on the higher priced branded goods and essentials.

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