Price-cutting promotions and the upcoming VAT reduction are encouraging people back into the shops as retailers report brisk trading.

Store owners said temporary discounts, coupled with the hoped-for Christmas rush and early introductions of the 2.5 per cent VAT cut to 15 per cent - which is officially implemented on Monday - have had a positive effect.

Across the country this weekend, many shops are offering short-term price discounts of up to 50 per cent on goods in the battle to lure in cash-strapped customers.

At the Bluewater Shopping Centre in Greenhithe, Kent, most retailers had implemented the VAT cut early to attract shoppers. A spokeswoman said shops were experiencing good sales and had high numbers of people through their doors - 6.7 per cent more compared to the same period last year.

And at PC World at the Lakeside shopping centre in Essex, around 500 people queued for a two-day promotion offering discounts of up to half price on laptops and cameras, with the line beginning to form late on Friday night.

At the Brent Cross shopping centre in north London, shops were feeling the start of the Christmas rush and reaping the benefits of short-term promotions of 20 per cent to 30 per cent off products.

General manager Tom Nathan, who also looks after Leicester's Highcross centre, said is "pretty hopeful" for a "reasonable" December at the centres, saying: "We know that people are having it tough and that's why retailers are responding by offering better value, and I do think they are making some headway.

"People are gravitating either towards price or quality. Christmas is coming and that's good news, people will want to celebrate."

He added: "The gloom never has been as bad as the media portray it to be."

In Birmingham, the general manager of the 160-store Bullring complex, Tim Walley, said the centre's car park was full by 10am and the mall had been extremely busy throughout the day.

"It's been very consistent all day long and the encouraging thing is that customers are all here with shopping bags," Mr Walley said.

The chief executive of the new Liverpool One shopping and leisure complex , Joanne Jennings, said trade was strong and there were plenty of bargains to be had.

She said: "We are feeling quite positive about Christmas but are not complacent. We currently have 500,000 visitors a week with nearly half of those coming at the weekend.

"Given the current economic climate, people are looking for what advantages they can get and we have some really good offers on at the moment with excellent discounts. There are sales on offering more than 25 per cent reductions so traders have acted before the reduction in VAT is implemented."

Patrick Lewis, director of retail operations for the John Lewis department store chain, said that sales on Friday were better than any day in the four previous weeks and attributed the uplift to introducing the VAT cut early.

But he warned that the VAT change would not be enough to boost sales of household items such a furniture, carpets and big appliances as people were simply not moving house as often as before.

He said: "It's still tough. All of the fundamentals in the housing market are still the same."

After a week in which two household names - Woolworths and MFI - went into administration, retailers have warned that a small drop in VAT could not compensate for the disastrous effects of a housing market in crisis and they said they were not complacent about ensuring their own survival.

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