Discounts and promotions have hit new heights in the run-up to Christmas as struggling retailers try to lure shoppers with huge price cuts, according to a report.

The average price cuts in the run-up to Christmas averaged more than 37 per cent of the full selling price compared with 34 per cent last year, the latest data from business advisory company Ernst & Young's 2008 Christmas pricing survey shows.

Ernst & Young said it expects discounting to increase even further in the final days before Christmas and into January.

The survey, which is being conducted between last month, and January, examines the prices of 1,000 non-food items at 54 of top retailers every two weeks.

Promotional activity has been more widespread and diverse than in previous years, with more price-cuts, multi-buys and shopping voucher offers taking place, the report said.

It added that, from the second week of December, there was a shift from promotional activity to markdowns across all retail sectors, especially entertainment, electricals and clothing.

"Since the beginning of November, we've seen every conceivable promotion on the high street - from viral marketing to store-wide promotions and multi-buys," Jason Gordon, Retail Director at Ernst & Young said in a statement.

"This promotional activity peaked in early December, but since then there has been a marked shift towards straight forward price cuts - at unprecedented levels across wide parts of retailers' ranges," Mr Gordon said.

"We expect even deeper cuts in the last minute pre-Christmas frenzy and January sales, as retailers desperately try to offload excess stock."

More and more retailers are trying to entice shoppers into their stores with pre-Christmas sales to offset the impact of deteriorating consumer confidence amid rising unemployment, falling house prices and higher utility bills.