Boden chief executive Julian Granville said that he expects the UK market to remain tough next year, as likely future tax increases bite into consumers’ disposable income.

“Compared to the US, the UK market hasn’t deteriorated as much so I think there’s less likely to be a massive rebound,” said Granville. “And that is combined with the fact that there’s bound to be pressure on disposable income as tax must rise to pay for the massive fiscal deficit in the public accounts.”

Boden reported a difficult 2008 in which pre-tax profit fell 9.5% in the year to December 21, despite a 9.4% increase in sales.

During the first half, Boden said that trading in the UK had been better than expected, despite customer spend remaining below last year.

Granville said that it had a cautious approach to expansion in the UK. “At the beginning of this year we were relatively pessimistic trying to grow our business, but looking back we could have been more optimistic and could have bought more stock and grown much better in the UK,” he said. ”We are seeing quite strong growth potential in the UK market.”

He added that the retailer was still gaining new customers, adding more than 500,000 in the last financial year – a figure it expects to beat over the next year.

However, he said getting customers to spend more during an economic downturn will be difficult.

Boden said that its US business was stable, despite the more challenging market than the UK.

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