Retailers should brace themselves for one of the worst years on record in 2009, as high street spending goes into reverse and retail profits nosedive.

The decline could potentially wipe£3.6 billion off retailers’ profits next year, and retailers should not expect any positive growth until 2014.

According to a report conducting by Verdict Consulting for Active Resilience, excluding internet sales and sales at grocers, retail spending growth on the high street will shrink by more than 4 per cent, which is the largest drop since Verdict’s records began in 1965.

The report also concludes that the VAT cut will do “virtually nothing” to reignite consumer spending next year.

Verdict Research consulting director Neil Saunders said: “2009 is going to be one of the worst years on record for the high street. The consumer purse is under significant pressure and while a cut in VAT may help household budgets, it is economic naïveté to think it is going to make consumers embark on a spending spree.

“The consumer is unprepared for this downturn, most are in an incredibly weak position to deal with it and there is simply no wriggle room in household budgets.”

James Flower, senior consultant at Verdict, said: “With such a dire outlook for the high street, it is inevitable that more retailers will go under. The length and depth of the retail downturn will test even the strongest of retailers and some will not last the course – at least not in their present form.”

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