Tough year for British, Irish retailers - academic

A retail expert from the University of Ulster has predicted that 2005 is going to be a tough year for retailers who will find…

A retail expert from the University of Ulster has predicted that 2005 is going to be a tough year for retailers who will find it hard to shake off the winter blues.

"There will be a period of initial slowdown in consumer spending for at least the first three to four months of 2005," said Mr Donald McFetridge, retail analyst at the University of Ulster.

"In addition, a likely inflation-busting rise in the minimum wage coupled with a hefty increase in the Uniform Business Rate, will hit many retailers hard - especially those with large numbers of part time staff such as supermarkets.

"Retailers such as Tesco will continue to be very successful in home markets like Britain and Ireland but their growing expansion could also give rise to a number of difficulties," he said.

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"Size and scale will need to be incredibly well managed and this will be a critical year for Tesco if they are to continue to beat their own targets.

"Marks & Spencer and Next will need to recover costs and profits lost during the pre-Christmas trading period, they may well pass on some of these costs to unsuspecting consumers."

Mr Donald said this year will be characterised by a move to retail convergence, with food retailers expanding into non-food product lines. He predicted this will cause mixed retailers like Marks & Spencer to struggle in an increasingly competitive marketplace.