BRC warns that retailers are in for a challenging year
The British Retail Consortium has warned that 2025 could be a challenging year for retailers.
Following fieldwork conducted from 10 to 13 December, BRC-Opinium data shows that consumer expectations for the state of the economy for the next three months have fallen to -27 in December, down from -19 in November.
While people’s expectations for their personal financial situation remains the same as in November at -3, their expectations for their personal spending on retail fell to -3 in December, down from +3 last month.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Public confidence in the state of the economy took a nosedive, falling 8pts to -27. This created a widening gap between expectations of the economy and of people’s own finances, which remained unchanged.
“The public’s spending intentions – both in retail and beyond – dropped 6pts, with expectations of spending in nearly every retail category falling. If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales.
“The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7 billion of new costs from the Budget set to hit the industry in 2025.
“With sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs – closing stores and freezing recruitment. To mitigate the impact this will have on growth, Government must ensure that its proposed business rates reform does not result in any shops paying higher rates than they already do.”
The news comes as the Confederation of British Industry’s latest Growth Indicator shows that private sector firms expect activity to fall in the three months to March with expectations now at their weakest in over two years.
Alpesh Paleja, CBI interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.
“Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.”
