Retail chiefs predict ‘flat’ Christmas

Higginson is one of several retail bosses who think the recession will drag on for longer than initially thought. He said: “I think the market will be flat at best at Christmas and part of that will be deflation. Although currency falls suggest we should see a bit of inflation I don’t think the competitive market will allow it.”

His comments are included in a survey commissioned by PR firm Kreab Gavin Anderson, which found many believe the consumer market will not pick up until 2011.

Among those who found retailers feared renewed setbacks next year include Marks & Spencer chairman Sir Stuart Rose, John Lewis chairman Charlie Mayfield, Alliance Boots chief executive Alex Gourlay, and Morrisons finance director Richard Pennycook.

Just over a third of those questioned – 34% - are not anticipating strong growth until 2011 or even later.

Just 13% expected the consumer market to pick up significantly this year. And nearly all – 94% - said they expected a slow recovery as tax rises squeeze shoppers’ disposable income.

New Look chief executive Carl McPhail said: “I’m not convinced we’ll see a recovery in the early part of next year as there will still be pressures, not least from unemployment, and our research shows customers are all concerned about that.”

Despite fears, two-thirds said they were more positive than seven months ago as fears of economic Armageddon had not emerged.

Pennycook said: “The market will go into Christmas in better shape, de-stocked and more cautious on forward orders.”

Rose said: “It will be a roller-coaster. Last Christmas was exceptional in terms of the global economic environment. This year there will be less background noise but a bit more competition.”