UK Annual Forecasts 2010–15: Retail and the Economy

The economic recovery in the UK is under threat in 2011 and this is having an impact on consumers' retail expenditure, with high unemployment, low consumer confidence and pressure on disposable incomes all changing shopping habits. The economic environment is expected to remain weak until the second half of 2012 - meaning retailers have further tough times ahead of them.

Make informed strategic decisions based on our assessment of the UK economy Gain insight on the key economic factors and how this will impact retail growth over the next five years Use the economic forecasts to 2015 to help identify the shape of the economic recovery and plan sales growth accordingly

Uncertainty is driving house prices and volumes down, as many are reluctant to move. This is impacting big ticket and home-related purchases. However, as the housing market recovers from 2013, these sectors will benefit from pent up demand. Lack of housing equity withdrawal will also impact spending on home-related sectors.

High unemployment will hit demand, particularly for discretionary purchases, and there will be an increased focus on value in food & grocery. Moreover, many more will tighten spending due to concerns of possible unemployment for themselves, family or partners.

High inflation and stagnant wage growth have both had an adverse impact on disposable income. The latter will remain squeezed until 2014 when more substantial wage growth should come through and unemployment should fall.

How will the main economic drivers impact retail sales growth over the next five years? How long is the fragile economic environment expected to last and how will it impact retail? When should I plan for a recovery in the housing market?

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Related research categories

By sector: General retail (in Retail)

By market: United Kingdom (in Europe)