Retailers are facing one of the worst Christmas' for 20 years, with an aftermath of retail casualties expected next year according to Verdict Research.
Verdict Research forecasted that UK consumers will spend £82.3 billion with retailers in the final quarter of 2008. Although this is an increase of 2% on the previous year, it is the second lowest growth rate in two decades and the £1.6 billion extra shoppers will be spending will be more than eaten up by food inflation.
Non-food spending is expected to fall in the run-up to the Christmas for the first time in more than a decade.
Catherine Tobiasinsky, head of retail at property consultancy EC Harris, which commissioned the report, said although times are tough, retailers should grasp the opportunity to think outside the box.
Tobiasinsky said: "In reality, anything is possible, with it being the best time in the last 15 years to reduce operational costs and beat inflation by maximising built assets. Tenants are becoming customers, retailers are becoming developers undoubtedly times are tough, but now is the time to innovate."
However, the report predicted that early next year will be particularly tough for all retailers. In the face of job losses and the arrival of post Christmas credit card bills, consumers will hold back from any unnecessary spending, particularly on big ticket items, precipitating a raft of further retail casualties.