Q4 retail outlook bleak

Retail Think Tank says all indicators point to a bad end of the year
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The KPMG/SPSL Retail Think Tank (RTT) has warned that, for the first time since it started soothsaying in April 2006, all three of the key criteria by which it assesses the future health of UK retail are looking gloomy.

It has concluded that demand, margins and costs are all headed in the wrong direction. Demand will be affected by people finally realising how in-debt they are, although interest rates may go down soon. This will lead to tighter margins as retailers who have over-bought are forced to discount early, while the cost of maintaining a web presence and an increase in the minumum wage were cited as negative cost factors.

On a brighter note, things weren't quite as horrendous in Q3 as the RTT had predicted, with a slowing in the increases of property rents being a rare positive trend. Things were still worse than Q3 2006, however.



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