Retailers face 'very tough' 2010

Mr Robertson's warning comes despite a strong Christmas for retailers

Retailers are facing a "very tough" 2010, despite posting upbeat Christmas sales figures, the head of the British Retail Consortium (BRC) has warned.

BRC director general Stephen Robertson said consumer spending may not grow in the face of tax rises and continuing economic uncertainty.

"There will be tough sales and perhaps no growth," he said in an interview with the Sunday Telegraph.

Marks and Spencer has already warned that 2010 trading will be difficult.

AT A GLANCE

M&S - like-for-like sales up 0.8% in three months to 26 December

John Lewis - revenues of £500.8m in five weeks to 2 January. Like-for-like sales up 12.7%

Next - like-for-like sales up 3.2% in 22 weeks to 24 December

Asda - said it had a 'solid' Christmas

Majestic Wine - like-for-like sales up 11.7% in nine weeks to 4 January

Ocado - like-for-like sales up 30% in four weeks to 26 December

Shop Direct - sales up 6.3% in six weeks to 1 January

Sainsbury's - like-for-like sales up 3.7%, excluding fuel, in the 13 weeks to 2 January.

Meanwhile, low-cost fashion retailer Peacocks said on Sunday that its like-for-like sales, which pulls out the impact of new store openings, rose 17% in December and early January.

Mr Robertson added that householders were also choosing to save more.

The RBC is expected to report on Tuesday that industry-wide sales in December were at least 4% higher than the same month in 2008.

It comes after retailers including John Lewis, Next and Sainsbury's all reported strong Christmas trading.

Upbeat festive figures are also expected this week from supermarkets Tesco and Co-operative.

Likely tax rises

With a general election due to take place before the summer, all of the main political parties have vowed to tackle the UK's public deficit, which currently stands at £178bn. This will likely mean both tax rises and spending cuts.

A new 50% top rate of income tax for those earning more than £150,000 will come into effect from April, and Labour has announced that National Insurance will go up from 2011.

While the Conservatives have put more focus on budget cuts, shadow business secretary Ken Clarke said earlier this month that a Conservative government would not rule out raising taxes.

Some commentators expect that if the Conservatives win power, VAT may go up from 17.5% to 20%.