Mintel warns of stifled retail sector in 2010
Fri, 30 Oct 2009
Richard Perks, director of retail research at Mintel, said consumers were likely to suffer once the General Election is out the way.
He said that when the next government is formed, interest rates and taxes will rise, leading to the "retail recession" that has not yet been experienced.
"Consumers have had it easy this year, that's because interest rates have been cut so far and that has far outweighed the impact of rising unemployment," Mr Perks added.
"But next year if that windfall gain from interest rates goes, unemployment is rising and we get higher taxes – which is almost inevitable, it's going to be really tough I think."
He said the planned increase in VAT will have an almost immediate impact in stifling consumer spending, especially as many retailers and suppliers cannot afford to continue with the heavy discounting that has been a feature of the high street in 2009.
The Confederation of British Industry reported this week that retail sales grew modestly in the year to October.
When questioned about sales last year, 41 per cent of retailers said volumes had risen, while 33 per cent said they were down.
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