The British Retail Consortium says business rates must be frozen next year, after it published new figures revealing a severe downward trend in retail sales growth.
The retail body states that growth is now averaging half what it was in the years before the Lehman Brothers collapse.
Coinciding with the fourth anniversary of the bank’s failure, the BRC’s new report illustrates just how hard the impact of the global financial crisis has been on UK retailers.
Year-on-year growth in the total value of retail sales has averaged just 2.1% over the last two years. That is below inflation, meaning that sales volumes have stagnated, and compares with much stronger growth of 4.5% over an equivalent period before the crisis. Like-for-like sales value growth has hovered around zero over the last two years, the BRC says.
With consumer spending having now fallen for three quarters in a row, the consumer sector has led the economy into a double-dip recession, says the BRC. Consumer confidence remains close to the record lows of 2008, the squeeze on real disposable incomes has persisted for almost three years and the impact on spending on essential items has intensified recently.
Now the BRC is calling on the government to control the costs it imposes on households, for example by scrapping the postponed fuel duty increase, now due in January.
It says it should also support businesses by controlling the costs it imposes on them. In particular, business rates should be frozen in 2013.
BRC director general Stephen Robertson said that with sales volumes now going backwards, the consortium’s new analysis “vividly demonstrates the lasting blow dealt to households and to retail sales by the crisis of 2008. Any successful economic fight-back needs a return to strength for the retail sector.”