We are now being warned that retailers could suffer a relapse with deteriorating trading this year due to rising taxes, interest rates and the uncertainty over the next government's economic policy. All of these factors we are being warned will take their toll on consumer spending.
The KPMG/Synovate Retail Think Tank, in its Retail Health Index had actually predicted the continuing improvement of retail sales into the first quarter of this year, but it did warn however of "dark clouds gathering on the horizon" and that consumers will make 3% fewer shopping trips this year.
Mr Nick Bubb, of Arden Partners, said: "A mini-reflationary bubble has been created. But that has to burst eventually and the 'phoney recession' that we experienced in 2009 will turn into the real thing at some stage later in this year."
Despite robust festive sales, retailers' fears over consumer spending this year were intensified by anaemic GDP growth of just 0.1% in the fourth quarter of 2009, according to the Office of National Statistics in the first weeks of February 2010.
From articles which we have looked at over the past week here at Greengates Builders Merchants Accrington, Lancashire we were under the impression that the retail sector had now in fact come out of the recession and was on its way to recovery and it was just the construction industry which was still suffering. However from the release of this report it would seem that our initial impressions were not true and the retail sector is still under threat from the recession just like the construction sector.