Retail consultancy Verdict Research offers scant comfort to UK retailers, now licking their wounds after disappointing pre-and post-Christmas sales.
Despite conflicting reports, it seems that the average British shopper exercised more self-control this holiday season than at any time in the past forty years. Verdict predicts that the increase in retail spending for 2003 as a whole will peak at 3.7% -- the lowest annual rate of growth in four decades.
Says the researcher's Richard Hyman: "After a roller-coaster ride last year, the slow build-up to Christmas will be followed by a particularly harsh environment this year. Growth will only really pick up steam in 2005. These conditions will put acute pressure on retailers."
He believes that with the recent rise in interest rates and growing concern about jobs stability, consumers' finances are coming under increasing pressure. Spending in the January sales -- particularly on non-essential big ticket items such as furniture and large electrical durables -- is likely to be cut back.
But there is a silver lining. Verdict expects growth to edge upward in 2005 to 4.2%, with consumer finances benefitting through governmental tax largesse in what may be the year of the next general election.
And despite the fatuity of longer-term forecasts in a world where the global economy hangs on such indeterminable factors as oil prices, SARS and terrorist attacks, Verdict predicts that UK retail spending will grow by 4.4% in 2006 and 4.2% both in 2007 and 2008.
Cheerier than Nostradamus, though!
Data sourced from: Financial Times; additional content by WARC staff