Retailers believe 2010 will continue to be tough but won't be worse than this year.
Four out of five retailers who responded to the British Retail Consortium's (BRC's) 2010 Concerns Snapshot Survey, published today (Monday), said they expected retail sales in 2010 to be the same as 2009. But, encouragingly, none thought sales would be worse and just over a fifth thought they would be better.
But retailers are concerned about a range of factors that could affect the strength and speed of the recovery in the New Year. Weak consumer demand topped respondents' concerns with 22 per cent of retailers citing it as their main worry for 2010, closely followed by rising unemployment at 20 per cent. The other major concerns reported in the BRC's Snapshot Survey are increases in personal taxes and weakness in the economy – both at 16 per cent.
The uncertainty is affecting retailers' ability to maintain and create jobs, a crucial part of recovery. Nearly a third of retailers said they expected to decrease employment in 2010 compared with this year.
Stephen Robertson, British Retail Consortium Director General, said: "Despite the last- minute hurdle thrown at shoppers by the weather, it's been a healthier retail Christmas than last year. Whether sales growth this year makes up all the ground lost last December is the key question but certainly more customers have felt confident enough about their own circumstances to spend – a modestly encouraging sign for the overall economy.
"Retailers will be hoping this is a permanent turn for the better not a brief break in the gloom. It's reassuring that our snapshot shows no retailers expect sales in 2010 to be worse than this year. But factors, such as weak consumer demand and rising unemployment, are at the heart of retailers' concerns about how the recovery will pan out. The inevitable tax rises will mean people have less to spend and retailers will have to work even harder to win the battle for hard-pressed customers.
"Politicians of all parties must recognise it's business that'll take us out of recession with retail leading the way. They must bring the public finances under control while avoiding excessive tax rises that would undermine demand, jobs and consumer confidence. Targeted, substantial and genuine pruning of public spending must take priority over tax increases."
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