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'The next few years will be challenging for retail' - BRC reacts to Autumn Statement

Laura  Barnes
'The next few years will be challenging for retail' - BRC reacts to Autumn Statement

The British Retail Consortium (BRC) has reacted to last week’s Autumn Statement, warning that the retail industry is will face challenging times over the next few years.

The BRC’s chief executive Helen Dickinson OBE also believed that there were missed opportunities to help boost growth and investment.

“This was a statement of stocking fillers rather than expensive presents, said Dickinson. “With a post-Brexit slow down forecast to make a big hole in public finances, there was little room for the Chancellor to pull out any real crackers. The key takeaway from today’s statement is that whilst Brexit has not heralded the economic decline some feared, the OBR is expecting a significant dent in UK GDP and hence in consumer spending also.

“As expected, the OBR has revised downwards its March forecast of growth and that means lower growth in consumer spending in the medium term. Whilst the UK economy as a whole will grow 1.4% in 2017 and 1.7% in 2018, household consumption is predicted to grow at just 1.2% next year and 1.1% the following year. This is a significant shift downwards from 2.2% this year.”
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She said that while the outlook is ‘not as bad as some predicted it could have been’ in the wake of the EU referendum, Dickinson warned: “The next few years will be challenging for the industry. Whilst shoppers’ spending power is falling, retailers will almost certainly have to absorb some of the underlying cost increases into their margins, rather than fully pass them on. As a result, retailers are likely to see slower volume growth at lower margins next year.

“For an industry with around 5% of its expenditure on transport services, the freeze in fuel duty will ease some pressure. However, compared to the coming increases in business rates and the National Living Wage, its impact will be virtually unnoticeable.

Dickinson concluded: “If there was one missed opportunity today to help boost growth and investment, it was the absence of further measures to reform the business rates system.”

Tags: Retail , brc , Autumn Statement

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