Retailers should brace themselves for one of the worst years on record next year, with high street spending going into reverse and retail profits nosediving.
That is the grim prediction of new research produced by Verdict Consulting, which says that, excluding internet sales and sales at grocery multiples, retail spending growth on the high street will shrink by over 4% in 2009 – the largest drop since Verdict’s records began in 1965.
This slower rate of growth at a time of increasing costs could potentially wipe £3.6bn off the collective profits of leading retailers in 2009.
And 2009 will not see the end of the retail slump. Although Verdict expects deterioration in spending to ease after next year the high street will continue to face a difficult time well past 2010, and positive growth is not expected to return until 2014.
Sales are predicted to decline by £17.6bn from £157.5bn in 2008 to £139.9bn by 2013.
“With such a dire outlook for the high street, it’s inevitable that more retailers will go under,” says Verdict senior consultant James Flower. “The length and depth of the retail downturn will test even the strongest of retailers, and some will not last the course – at least not in their present form.”