|Retail sales growth is now averaging “half what it was in the years before the Lehman Brothers collapse”, according to the British Retail Consortium (BRC).
The BRC is publishing data to coincide with the fourth anniversary of the bank’s failure. It shows the impact of the global financial crisis on UK retailers has been severe, long lasting and continues to be felt.
As the party conference season begins, and on the day business secretary Vince Cable is due to address Liberal Democrats, the BRC is calling on the government to restore consumer confidence by controlling the costs it imposes on households – for example by scrapping the postponed fuel duty increase, now due in January. It should also support businesses by controlling the costs it imposes on them. In particular, after two years of substantial rises, Business Rates should be frozen in 2013.
Year-on-year growth in the total value of retail sales has averaged just 2.1% over the last two years. That is below inflation meaning sales volumes have stagnated. (This compares with much stronger growth of 4.5% over an equivalent period before the crisis.)
Like-for-like sales value growth has hovered around zero over the last two years. With consumer spending having fallen for three quarters in a row now, the consumer sector has led the economy into a double dip recession.
UK economic output remains 4% below its pre-recession peak and the continued weak economic situation has ensured that consumer confidence remains close to the record lows of 2008. The squeeze on real disposable incomes has persisted for almost three years and the impact on spending on essential items has intensified recently.
BRC director general, Stephen Robertson, said: “Four years on from this key event in the banking crisis, which sent retail sales plummeting, sales growth is still less than half what it was before. Sales volumes are now going backwards.
“Representing over 5% of GDP and more than 10% of jobs, retail is a vital part of the UK economy and a key indicator of its health. Retail is fundamentally resilient. It’s still the biggest private sector employer in the country but this analysis vividly demonstrates the lasting blow dealt to households and to retail sales by the crisis of 2008.
“Any successful economic fight back needs a return to strength for the retail sector. It’s not enough just to talk about growth. We need the government to rebuild confidence, support customers and retailers and get spending going again by holding back the costs it is responsible for.
“Scrapping the postponed fuel duty rise, now due in January, and freezing Business rates next year are top of my list.”
Source: BRC-KPMG Retail Sales Monitor