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Retailers need to pull together
It's only one month and not the three required to meet the technical definition, but the October total sales decline announced by the British Retail Consortium this week confirms that retail is entering recession.
It was clear to anyone who talks to retailers that there was an immediate reaction to the collapse of Lehman Brothers and HBoS; consumer confidence fell off a cliff. Events since have ensured it's not coming back in a hurry. There will be exceptions that prove the rule. Sainsbury's showed this week how it is benefiting from customers trading down from more expensive grocers, while for the fortunate few like Sir Philip Green, there are opportunities to pick up stakes in companies such as Moss Bros. But for most, a long winter of struggle lies ahead and while those that have fallen so far this year have tended to be minnows, the collapse of Circuit City in the US into Chapter 11 this week showed just how severe this crisis is. The withdrawal or reduction of cover by the credit insurers could prove to be critical and suppliers that are facing their own problems too will be much quicker to cut off supply if they can't be confident they'll be paid. Sadly there will be big-name casualties in the new year. Retail is a huge contributor to the economy. It employs more people than any other part of the private sector. Yet it's ironic that while it is used as a barometer of the health of the economy, there is never a reaction on the part of government in the same way as there is when manufacturing businesses or banks hit trouble. Business rates is a key area where the Government could give ground. When the revaluation kicks in in 2010, retail could be on its knees. To hit the industry with a tax that reflects top of the market property values would be catastrophic. Sir Terry Leahy, Charlie Mayfield and Justin King have already lent their voice to the campaign – but we need yours too. As last week's mammoth interest rate cut showed, the voice of business is being listened to. If we can bring together the views of retailers large and small and let the Government know just what a big issue this is for the industry, there's a chance of success. retail-week.com , Tim DanaherИнтервью
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