According to research by PwC, 60% of stores on the high street are on sale, particularly department stores and footwear. Average discounts being advertised are 45%. This compares to 40% of retailers who were on sale this time last year, when most discounts started at 50%.

Andy Lyon, retail sector expert at PricewaterhouseCoopers, Midlands, said: "Retailers in the Midlands are holding their nerve and continue to sell stock at full price. But many have brought sales forward by around a week to stimulate footfall to clear stock. The disappointing weather over the past few weeks and weak consumer confidence ahead of the emergency budget has caused retailers to start discounting earlier than usual. However, there are lower stock levels going into the sales than last year as cautious merchandise planning has kicked in.

Looking ahead to next week's Emergency Budget, Andy Lyon added: "We are expecting a VAT increase of 2.5% to be announced next week, but it is not expected to take effect until April 2011. This will allow retailers time to take the necessary action to avoid their margins being eroded. Of course, this delay could also encourage people to head for the shops to make a few big ticket purchases before the rate increase is made."