King told Retail Week that the nationalisation of two of the UK’s banks is a move that “broadly speaking, everyone thinks is a good idea”.
But while he was reassured that consumers accepted the changes in the banking sector were positive, the Sainsbury’s boss warned that the “absence of dissenting voices is worrying”, highlighting that increasingly momentous decisions have been based on little knowledge or information.
“The time for debate and challenge has been short-circuited and that needs to be brought out over the next few weeks and months, although the Government is well aware of this,” he added.
Speaking at the IGD Conference on Tuesday, King said: “We’re not out of the woods yet in terms of the impact [of the banking crisis] on the real economy, but we are starting to make sense of the changes we are facing.”
King said that while Sainsbury’s was continuing to invest, others may have to assess where they are getting their funding from and whether capital expenditure can be maintained.
He said: “The impact [of the credit crunch] has not been felt evenly across all consumer goods and while there is still good growth in food, dramatic change has been seen in the sectors linked to selling deferrable items, attached to house moving or if they require borrowed money.”
He said that confidence is key and retailers will play a key role in helping maintain it as “fear itself is corrosive”. He added that while in a year’s time he would hope that the sector would “wonder what all the fuss was about”, he expected they would instead “be asking how much longer it was to last”.
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