Confidence among retail and wholesale businesses in the last quarter of 2010 fell to the lowest level seen during the year, and it is now significantly below the UK average.
According to the latest ICAEW/Grant Thornton UK Business Confidence Monitor, which tracks the confidence levels of UK finance and business professionals, only 37% of companies in the retail sector are more confident in their economic prospects over the next 12 months compared to the last 12 months. This is in contrast to a national average of 46%.
The retail sector fared better than the UK average for growth in profits, sales and turnover last year. However, having seen a 2.8% increase in sales in 2010, retailers expect sales growth to slow to 2.6% in 2011, while across the economy as a whole they are expected to rise by 3.6%.
Retailers saw a 3.5% increase in gross profits over the last 12 months but expect growth to slow to 2.6% in the coming year. Across the economy as a whole, profits are expected to increase by 3.3%.
On the positive side, says the BCM, retail and wholesale firms expect exports to increase by 4.7% this year compared to the national average of a 4.3% rise. Exports for the retail sector over the last 12 months increased by 4.1%.