2011 'to be challenging for retail'

The coming year is set to bring falling sales, though the retail industry will still create jobs, according to the British Retail Consortium (BRC).

Among the biggest concerns revealed by the group's Retail Prospects for 2011 snapshot survey are weak demand from consumers and pressure caused by inflation, while the poll also highlighted lower-level worries about the general state of the economy.

Overall, 64% of businesses said they expected retail sales to worsen next year, while just 18% expect an improvement. In addition, almost three-quarters said that they expected their prices - excluding VAT - to rise.

Despite this, businesses remained broadly optimistic about staffing in 2011, with 47% saying they expect their employment levels to increase, compared to 24% who expected them to decrease.

The BRC also asked those polled what they would like to see from the Government in 2011, if it is to live up to its goal of 'making the UK a good place to do business'. The most popular response was for existing regulations to be reduced or relaxed, with avoiding new regulation, and focusing discussion on growth - as opposed to cuts - coming in joint second.

Reducing National Insurance Contributions (NICs) also remains on the agenda for businesses - something which has been highlighted earlier this year by the Federation of Small Businesses (FSB), which called for a UK-wide 'holiday' on what it termed "a tax on jobs".

BRC director-general Stephen Robertson said that spending in December had been affected by the "nightmare weather".

"Our snapshot shows our retailers expect a difficult December to be followed by a tough 2011.

"But the positive news is retailers have their eyes on the horizon and are demonstrating more faith in longer-term prospects.

"The message for [the] Government is clear.

"At a time of public sector cuts, retailers want to go on delivering the economic growth the country needs.

"But politicians must help them by rowing back on costly regulation."

Last week the FSB called on the Government to give small firms "the breathing space they need to stay afloat", with the VAT rise following closely on December's severe weather.

'Horrible' year

Meanwhile, TUC general secretary Brendan Barber has predicted that 2011 will be a "horrible" year.

Speaking in his New Year message, Barber said he anticipated job losses and a fall in the nation's living standards as a result of the Government's public spending cuts, also highlighting January's VAT rise to 20% as "the unfairest tax of all".

In addition to the thousands of public sector jobs he said would go due to the austerity measures, Barber predicted that "just as many - if not more" would also be lost in the private sector, due to both the measures themselves, and the ensuing reduction in economic activity.

IMAGE AP Photo/Alastair Grant

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