Retail sector to suffer next year
September 2, 2009
A new study suggests that the U.K.’s retail sector has not yet felt the worst of the recession. The report by BDO Stoy Hayward LLP, an accountancy and business advice firm, predicts that a rise in unemployment figures will force more than 5000 retailers to close in 2010.
Retail business restructuring Partner, Tony Nygate said that unemployment figures had not thus far risen in line with the contracting economy because employers in the retail sector had managed to introduce flexible working hours, reduced wages and reduced working hours instead of implementing redundancies.
He said that these practices had also kept spending up in the sector and helped many firms stay afloat.
However figures show that around 24,000 shops in town centers have already gone out of business, a figure that is three times that of last autumn.
Last month saw a drop in the numbers of shoppers on U.K. high streets drop by 4.1 percent.
Figures show that retailers did manage to sell 3.3 percent more stock last month but in order to do that many have slashed prices dramatically.
British Retail Consortium spokesman, Richard Dodd said that a fear of unemployment and a wish to hold back on spending because of uncertainty will damage the retail sector further.
Experts predict that it is retail that will take the longest to recover from the economic downturn.
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