Retailers face pricing pressure
Following a respectable top-line performance by many retailers in December, UK consumers have been reluctant to splash out on the January Sales.

And this muted performance could signal that the UK is beginning to go down the discount-driven strategy of the US, warned Ernst & Young.

'Better stock management at Christmas resulted in a shorter January Sales period and consequently impacted the month's results,' said Ernst & Young director of retail Tim Sleep. 'However, the bottom line is that consumers now expect big discounts - they are simply no longer willing to pay full price for many goods. The UK retail sector is in danger of going down the US route, where there is constant downward pressure on prices.'

Sleep added that the outlook for the year remains tough, with increased pressure on the top-line, in the form of fickle consumers and intense competition. Increases in rent, rates, energy and staff costs also make the squeeze on margin 'more intense than ever before'.

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