Retailers fear falling sales in 2011, but will still create new jobs

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A majority of retailers predict a decline in business in 2011. Their biggest concerns for the New Year are weak consumer demand and inflationary pressures.

Nearly two thirds of retailers responding to the British Retail Consortium's (BRC's) Retail Prospects for 2011 snapshot survey, published today (Monday) , said they expect retail sales to worsen compared with 2010. Eighteen per cent expect an improvement.

Despite these immediate fears, retailers continue to focus on the long-game. They plan to go on investing and maintaining or creating jobs. 47 per cent of retailers expect to create jobs in 2011 – though 24 per cent expect to employ fewer people.

The Government has said it wants to make the UK a great place to do business. Retailers were asked for the three changes they thought would make that happen. Top of the list was 'Reduce or relax existing regulations' followed by 'Avoid new regulations' and 'Talk about growth instead of cuts'.

Stephen Robertson, British Retail Consortium Director General, said: "We were expecting the final figures for December spending to be modestly up on last year but we now have to factor in the effects of the nightmare weather.

"Despite the combination of snow and concerns about their money and job prospects, most customers were still determined to buy the things they wanted for Christmas and did seize the opportunities they had to shop. It was usually a case of the timing of shopping moving around rather than being lost altogether. The disruption won't have helped sales but my hope is that the overall impact will turn out to be less severe than some fear.

"Our snapshot shows retailers expect a difficult December to be followed by a tough 2011. They believe the VAT rise will contribute to higher prices and, with fears about Government cuts and the wider economy, people will be put off spending.

"But the positive news is retailers have their eyes on the horizon and are demonstrating more faith in longer-term prospects. An encouraging proportion intends to increase investment and create jobs.

"The message for 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."

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