Tough year ahead for British retailers

Officials from the British Retail Consortium have recently stated that despite the encouraging sales figures seen by retailers over the Christmas and New Year period most retailers would be facing yet another very tough year over the course of 2010.

Stephen Robertson from the BRC said that there was still a lot of uncertainty about the economy and this, coupled with tax increases and pay freezes, would result in consumers continuing to cut back on spending, which would clearly impact on retailers.

In a recent interview Stephen Robertson stated that sales would be tough and there would possibly be little or even no growth in the retail sector. One major High Street retailer, Marks & Spencer, has already acknowledged that 2010 is set to be a very tough year in terms of sales and profits. Robertson said that in the current climate households were determined to cut back on their spending and try and save more money or repay more debt, and as a result of this spending on the High Street was set to continue suffering.

It is thought that sales over the Christmas period for 2009 were around 4 percent higher than the same period in 2008, so retailers may have been encouraged by the higher level of sales seen last year despite the recession and the difficult financial climate. However, with many people likely to have made resolutions to cut back on spending over the course of this year the tables could quickly turn.

The public spending deficit in the UK is now extremely high, and all of the political parties are looking at ways to try and cut the deficit as quickly as possible. Whilst this may be done partly as a result of cuts in public spending there is also the risk of higher taxes, which would further impact on consumer spending.

Tags: Retail Consortium, consumer spending, Socioeconomics, High Street, Marks & Spencer, economics, Deficit