Home / Knowledge / News / Retailers should brace for 2009 as worst year on record - Verdict Research
Retailers should brace for 2009 as worst year on record - Verdict Research
09
Dec '08
Despite a reduction in VAT and extensive discounting by retailers, the high street is suffering badly. However, the New Year will not bring about a change in fortunes and retailers should brace themselves to cope with one of the worst years on record in 2009.

As pressured consumers look to save money, high street spending will go into reverse next year and retail profits will nosedive. According to Neil Saunders Director of Verdict Consulting – the specialist division of Verdict Research – in an analysis conducted on behalf of ActiveResilience*, 2009 will prove to be the real crunch for many shops.

Unprecedented decline in sales will wipe billions off retail profits next year:
Pressure on the high street will not ease after Christmas and is set to intensify in 2009, according to research produced by Verdict Consulting for ActiveResilience. Excluding internet sales and sales at grocery multiples, retail spending growth on the high street will shrink by over 4%, the largest drop since Verdict's records began in 1965.

This slower rate of growth at a time of increasing costs could potentially wipe £3.6bn off the collective profits at leading retailers in 2009.

Spending growth at all time low in 2009:
Over the long term, the recent cut in VAT will do virtually nothing to reignite consumer spending in 2009 and shoppers will spend over 4% less on the high street than they did in 2008, Verdict has forecast. Such a sharp fall will be the worst performance since Verdict's records of consumer spending began in 1965.

A more cautious consumer, a higher proportion of spending made on food because of price inflation, and the cannibalisation of the internet will all contribute to the high street's decline. “2009 is going to be one of the worst years on record for the high street” says Neil Saunders, Consulting Director of Verdict Research.

“The consumer purse is under significant pressure and while a cut in VAT may help household budgets it is economic naïveté to think it is going to make consumers embark on a spending spree”.

The pressure on the consumer is intense. According to Verdict, over the past ten years consumers have consistently spent more than they have earned: income growth has run at an average of 2.4% a year, but has been outstripped by spending growth which has grown by 3.3% a year.

The shortfall has been made up both by consumers dipping into savings and consumers taking on additional debt. This has left household finances in a precarious position and has decimated the appetite to spend.

“The consumer is unprepared for this downturn, most are in an incredibly weak position to deal with it and there is simply no wriggle room in household budgets” comments Saunders. “No amount of VAT cutting is going to change that.”

2009 will not be the end of it:
Although the deterioration in spending will ease after 2009, the high street, excluding grocery and internet sales, will continue to face a difficult time well past 2010 and positive growth is not expected to fully return until 2014.


Must ReadView All

Sanjay K Jain, managing director, TT Ltd

Textiles | On 21st Sep 2017

TT’s Sanjay Jain elected new chairman of CITI

The Confederation of Indian Textile Industry (CITI), the apex body...

Textiles | On 21st Sep 2017

NRF urges US lawmakers to lower corporate tax rates

The National Retail Federation (NRF) has written to the US Senate...

Apparel/Garments | On 21st Sep 2017

UK fashion exports £10.7 bn in 2016; highest till now

Exports of British fashion goods rose to £10.7 billion in 2016, the...

Interviews View All

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

C Kamatchisundaram
Voltas

ITME is an occasion not only to receive new leads but also to work on...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

September 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search