13 February 2008, 15:58 PM
  • A combination of intense competition, space saturation, consumer apathy and slowing spend will make 2008 an extremely challenging time, a new study by Verdict Research reveals.

Since 1998, there has been an additional 49 million sq ft in retail space. The research explains that competitiveness on the sector is partly due to this expansion, which has given people more choice in where to shop and has spread consumer spend more thinly between a greater number of retailers and shopping locations. But up until now a solid growth in consumer spending made this expansion viable. However, Verdict believes things are about to change as credit is no longer easy to come by, confidence is low and there is a significant pressure on disposable income.

Neil Sanders, consulting director at Verdict, says, “Unfortunately for retailers, the laws of supply and demand are absolute: demand from consumers is falling at a time when retail supply in the form of new space is increasing. The bottom line is that there just isn’t enough growth to go around between physical retailers, new space and the internet. Something, somewhere, has got to give.

“We are not predicting disaster for the retail economy as a whole, but there are undoubtedly rough times ahead which will sort out the winners from the losers – and not all the losers will survive.”