ZURICH, Dec 5, 2008 (AFP) - The never-ending stream of shoppers snapping up holiday gifts at Zurich's main shopping street Bahnhofstrasse are sending tills ringing, but traders fear this may be the last surge before the drought.

Photo AFP

Sales in "October were still relatively good," with most shops posting better results than 2007, said the chairman of the Bahnhofstrasse association, Markus Huenig.

"But the growth is weaker than a year ago, especially for jewellers," he said.

Decorated with festive bells, lights and wreaths, Bahnhofstrasse and its numerous luxury boutiques are getting ready for a sales marathon in the lead-up to Christmas, when not only the locals but also foreigners who descend on the affluent city for a shopping spree.

While major luxury brands are keeping mum about their sales, independent boutiques say that the economic crisis has not had an impact on sales at the moment.

Hans-Walter Meyer, who is deputy director of jeweller and watch-maker Guebelin, said clients appeared not to have been affected by the crisis.

Watch boutique Meister chimed the same positive note, with its director Daniel Schollenberger saying he has "not witnessed any slowdown."

"2008 would post around the same level (of sales) as a year ago, but if there is a small drop this year, it is because 2007 was an exceptional year," he said.

Mid-way along Bahnhofstrasse, across from two banks that were humbled by the subprime crisis, UBS and Credit Suisse, stands the Savoy Hotel, one of the most prestigious addresses and popular with high-spending foreigners.

"We are fully booked and 2008 should post the same level of sales as the year ago," director of the five-star hotel Manfred Hoerger said.

"There would be some change in 2009, but it is difficult to make forecasts."

Economic institute KOF also confirmed the trend in a recent study which found that sales would grow at year-end.

The situation should last into the "first months" of 2009, said KOF, adding that "Swiss households would only adjust their purchases in the course of next year."

At the moment, the shoppers of Bahnhofstrasse appear to shrug off economic indicators, which are increasingly pointing towards a recession.

The UBS consumption indicator fell in October, while the last quarterly survey by the Economic Ministry found that the consumer confidence was weakening.

The OECD expects the Swiss economy to slip into a recession next year, with negative growth of 0.2 percent before rebounding in 2010.by Andre Lehmann