Retail sales growth is now averaging half what it was in the years preceding the collapse of Lehman Brothers.
Four years on from the bank’s failure, the British Retail Consortium (BRC) is publishing figures that show how much the global financial crisis impacted, and continues to impact on UK retailers.
With the commencement of the party conference season, the BRC is calling on the Government to restore consumer confidence by controlling the costs it imposes on households through measures such as scrapping January’s proposed fuel duty increase.
After two years of substantial rises, the BRC is also calling for the Government to support businesses by freezing business rates in 2013.
Year-on-year growth in the total value of retail sales has averaged just 2.1 per cent over the last two years, a figure which falls below inflation. Like-for-like sales value growth has hovered around zero over the last two years and, with consumer spending having fallen for three quarters in a row, the consumer sector has led the economy into a double dip recession.
UK economic output remains at four per cent below its pre-recession peak, with the continued weakness of the economic situation ensuring that consumer confidence remains close to the record lows of 2008.
Director general of the BRC 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 five per cent of GDP and more than 10 per cent 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.”