Retailers cutting back on investment

A new Post "Retailers cutting back on investment" was written on the February 18, 2012 at 11:09 pm on "Textile Global - Textile and Fashion News".

In a tough retail climate, Britain's leading stores and retailers are
cutting back on investment in their businesses and increasing cash
reserves, according the British Retail Consortium. In a study for the
BRC carried out by Oxford Economics examined 21

FTSE-listed retailers and found that average individual cash holdings
rose 50% between 2006 and 2011, from £283 million in 2006 to £424
million in 2011. While cash balances rose, investment as a proportion
of turnover fell by 27% over the same period. British Retail
Consortium director general Stephen Robertson said: "These figures
suggest the Chancellor has much more to do to inspire confidence in
business. Retail could drive growth and job creation across the UK if
the trading conditions were right. But, over the last five years,
retailers have been accumulating cash they are often too fearful to
invest. The decisions the Chancellor takes will have a big impact on
when and where those businesses expand.

"Like other sectors, retail investment is globally mobile. Overseas
markets have become increasingly attractive. To secure serious growth
the Chancellor needs genuinely to deliver on making the UK more
competitive than its rivals for that investment."

The BRC is submitting recommendations to the Chancellor ahead of next
month's Budget, and is warning that he must create conditions that
encourage retailers to turn that cash into growth-producing
investment. In addition it will say that he must improve UK
competitiveness to make it more attractive for retailers invest in the
UK than abroad.

In its Budget Submission 2012: Towards Competitiveness the BRC set out
its priorities for a more competitive UK which include:

Lowering the planned 5.6% increase in business rates to no more than
the 3.2% CPI expected at the time of introduction. The BRC argues that
retailers use a lot of property, therefore leaving them more exposed
to increases in business rates.

The government should work with retailers and landlords to achieve
wide take-up of the new Small Business Lease that was developed with
the Royal Institute of Chartered Surveyors to increase business cost
certainty. The BRC argues that affordable and predictable property
costs are key to survival rates.

Image: Oxford Street

More here:
Retailers cutting back on investment

http://www.textileglobal.com/2012/02/retailers-cutting-back-on-investment.html

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