Retailers are up against intense competition, space saturation, consumer apathy and slowing spend, which will result in a number of casualties.
Verdict consulting director Neil Saunders said: “The UK consumer is going to feel the pinch in 2008. This means one thing – for the foreseeable future, the era of solid year-on-year growth for retail is over.”
The report said that, over the next 10 years, retail spending will grow by an average 2.8 per cent a year, compared with 4.9 per cent in the past 10 years.
Saunders said: “One of the reasons for sluggish demand is the state of consumer finances. For the past 10 years, consumers have been willing and able to spend. They have been helped, in part, by low interest rates, high levels of confidence and rising house prices. All of these things have allowed shoppers to live beyond their means and have allowed sustained and healthy levels of retail growth.
“However, credit is no longer easy to come by, confidence is low and there is significant pressure on disposable incomes. We are not predicting disaster for the retail economy as a whole, but there are undoubtedly rough times ahead that will sort out the winners from the losers – and not all of those losers will survive.”