The financial crisis has wreaked "severe and long-lasting" damage on our high streets, retailers warn today.
Research carried out for the British Retail Consortium (BRC) found sales growing at less than half the rate they were before recession struck in 2008. Its report said: "The impact of the global financial crisis on UK retailers has been severe, long-lasting and continues to be felt."
Official figures are set to confirm that the double-dip recession extended into a third quarter between April and June, with the economy still 4 per cent below its pre-recession peak. The financial health of consumers – which accounts for about two-thirds of the economy – is vital for recovery prospects but a looming inflation squeeze this winter as energy bills rise threatens to deal a fresh blow to household budgets.
The BRC's findings will add to the jitters among retailers as they prepare for the key Christmas trading period, when many make about 40 per cent of their profits. While many big chains, including John Lewis, Dunelm Mill and Primark, continue to see strong growth, others are struggling. Sales at the entertainment retailer HMV fell by 11.6 per cent in the 20 weeks to 15 September, while JJB Sports is on the brink of administration in a rescue which will see about half of its 180 stores closed.
The BRC says growth in the total value of retail sales has averaged just 2.1 per cent over the past two years – below the rate of inflation.
Stephen Robertson, the director-general of the BRC, said: "Four years on [from the collapse of Lehman Brothers], which sent retail sales plummeting, sales growth is still less than half what it was before."
The BRC urged the Government to do more to help shopkeepers, such as by freezing business rates. As the Liberal Democrats kicked off the party conference season, Mr Robertson also said the Coalition should "restore consumer confidence" by controlling the costs it imposes on household budgets. "Any successful economic fightback needs a return to strength for the retail sector," he said.
The BRC is calling on the Chancellor to freeze business rates and cancel January's fuel duty increase to ease pressure on retailers, who account for 10 per cent of the UK jobs market.Reuse content