Where will the retail squeeze be felt the most?

Life has been tough for retailers - and it could be about to get much worse. However, it will be another sector which really feels the squeeze.

Life hasn't been particularly easy for high street retailers in recent years, amid rising costs, falling prices and rampant competition. But the bad news for shopkeepers is that it looks like things are set to get a lot worse. Research firm Verdict this week predicted an increase in the number of high-street retailers going bust. Underlying sales (that is, sales excluding new stores), says Verdict, will scarcely increase at all over the coming five years, while costs will keep rising at around 3% to 4% a year, driven higher by rent increases and expanding minimum wage bills.

Certainly, town centre shops are under pressure. Suburban retail parks are drawing away business, while online shopping although representing a small percentage of overall consumer spending is showing huge growth. Verdict calculates, with an apparent precision that is hard to credit, that last year town-centre shops took £767million less than they did in 2004. That fall, equivalent to 0.6%, is reckoned to be the first annual decline in living memory.

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Annunziata Rees-Mogg

Annunziata was a deputy editor at MoneyWeek, covering financial markets, politics, economics and comment pieces. She then went on to the Daily Telegraph as a lead writer where she wrote a column on young women’s financial issues. She was briefly a member of the European Parliament for the East Midlands region in the UK as part of the Conservative Party.  Annunziata continues to write  as a freelance journalist.