Retail growth a thing of the past, says research group

The days of consumers living beyond their means are over, according to a retail research group's findings published today.

Verdict Research Consulting is the latest body to predict a year of economic woe, suggesting that "sustained and healthy levels of retail growth" are set to become a thing of the past as credit sources dry up and pressure grows on disposable income.

The group's gloomy forecast about the pressures on disposable income is bound to add to fears that the more vulnerable parts of the pub sector will see a further fall in trading in the months ahead.

The "golden growth drivers which have underpinned retail growth are now becoming tarnished," said Neil Saunders, Verdict's consulting director.

"Costs for households are outstripping income growth by some margin. The upshot is that the consumer will cut back on retail spending," he added.

Verdict suggests that average domestic utility costs will rise by 12 per cent in 2008, mortgages and interest payments will increase by five per cent, and taxation will grow by four per cent.

These increases are set against average post-tax income growth of three per cent.

"The UK consumer is going to feel the pinch in 2008," said Saunders. "This means one thing - for the foreseeable future, the era of solid year-on-year growth for retail is over."

Saunders said that Verdict Research is forecasting retail spending will grow by an average of 2.8 per cent per annum, compared with an average of 4.9 per cent over the last ten years.