UK: Retailers talk down double-dip recession
Two of the UK's leading fashion retailers say they do not fear a double-dip recession in the country's economy despite a recent spending freeze.
However, both cautioned that weak spending on the high street would continue in the years to come.
They were speaking on the first morning of the Retail Week Conference 2011 in London today (16 March).
The UK economy saw GDP growth slip 0.6% in the last three months of last year, while retail sales were hit by unprecedented snowfall.
Templeman said: “I don't think we're going to have a double-dip. Retailers have had a tough year and I think we're going to have to learn to manage our businesses slightly differently.
“If you look back over the past five or six years we've had deflation and driving more volume. But I think we're going to see volume declines this year.
“We've got to get smarter about how we run our businesses and pass that inflation through. There's also going to be divergence of customer habits this year – from 'I want' to 'I need'.”
Department store chain Debenhams this week said its like-for like sales were down 1.5% in the six months to 26 February, but said gross revenues were 3.2% higher than the previous year.
Meanwhile, value fashion chief McPhail also talked down a double-dip recession but highlighted the changing retail environment.
He said: “I think it's going to be very challenging for the UK consumer.
“There's this continued uncertainty and speculation that is driving consumer activity for us. We see that certainly since post-Christmas with some of the footfall we're experiencing at this moment in time.
“I think we've taken all the costs out of the business that we can and efficiencies that have been coming in the last three years will make it very challenging in the coming years.”
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