Britain’s leading retail bosses are predicting that tough trade will last at least through 2009, with many saying they do not expect the market to revive until the end of next year.
In a survey compiled by PR firm Kreab Gavin Anderson, 29 of the UK’s biggest retail names, which included Arcadia Group and Bhs owner Sir Philip Green, Next chief executive Simon Wolfson and Mark & Spencer chairman Sir Stuart Rose, two thirds of retailers said they did not expect the market to pick up until the end of 2009.
More than a third said they did not expect the market to revive until until the end of 2010, at the earliest. Even then, most predicted a slow crawl out of the slump they they described as the worst that they had ever traded through.
One leading retailer said: “This is the most severe downturn I have had in my 20-plus year career. The…low visibility about whether it has further to go marks it out.”
Of the executives surveyed, 62% said they would cut jobs or were considering cutting jobs, and and nearly 80%said they expected more store closures and takeovers in the retail sector.
About 93% were critical of the Government’s 2.5% cut in VAT before Christmas, saying that it had not helped trading because stores were already offering much larger discounts to tempt shoppers.
Interest rate cuts were popular though, with 83% of the retailers surveyed suggesting that they had boosted trade or would do in the future.
However, several executive were against further interest rate cuts, saying that this would not help to lift spending and would hit savers and older shoppers.
M&S chairman Sir Stuart Rose said: “We have got to the point that it is a nil-sum game. There is no point in them coming down further. The biggest single thing is the availability of money.”
JJB Sports chairman Sir David Jones added: “I think it would be wrong to cut interest rates again as there are a lot of people who rely on savings and they have already been hit really hard.”