Retailers’ insistence on discounting in order to drive sales will not work over the longer term, according to the British Retail Consortium’s (BRC) pre-budget submission filed today.
The trader group said, while the latest figures from the Office of National Statistics show the value of sales in January were up slightly on the same month in 2011, most of the activity has been driven by very heavy discounting.
Stephen Robertson, director general at the BRC, said the only thing driving growth in the market is the level of stock being put on sale.
He added: “Discounting is biting into retailers’ margins with non-food businesses facing particularly tough times.
“We are looking to the Government for steps to inspire confidence in business. Our pre-Budget research shows economic uncertainty is putting retailers off expanding their operations.
“In his Budget next month the Chancellor must take steps to make it more attractive for retailers to invest and create jobs, and to improve UK competitiveness so they do that here. It’s a mistake to see retail as a sitting duck. Retail investment is globally mobile and the UK has to fight for it.
“Reforming the flawed system for setting business rates, which this year threatens an unaffordable increase of 5.6 per cent, is key but so is work to simplify planning, expand online opportunities overseas and incentivising investment in new equipment and technology.”