Home Or Away? Retail Investment In Chancellor's Hands

New pre-Budget research for the British Retail Consortium (BRC) shows economic uncertainty is causing retailers to hold back investment and increase cash reserves. In its submission to the Chancellor ahead of next month's Budget, the BRC is warning that:- 

• He must create conditions that encourage retailers to turn that cash into growth- producing investment.

• He must improve UK competitiveness so it is more attractive for retailers to make that investment in the UK than abroad.

The independent study for the BRC by Oxford Economics examines 21 FTSE-listed retailers. It shows their average individual cash holdings rose by fifty per cent between 2006 and 2011 – from £283 million in 2006 to £424 million in 2011. While cash balances rose, investment as a proportion of turnover fell by 27 per cent in real terms over the same period.

British Retail Consortium Director General Stephen Robertson said: "These figures suggest the Chancellor has much more to do to inspire confidence in business. Retail could drive growth and job creation across the UK if the trading conditions were right. But, over the last five years, retailers have been accumulating cash they are often too fearful to invest. The decisions the Chancellor takes will have a big impact on when and where those businesses expand. 

"Like other sectors, retail investment is globally mobile. Overseas markets have become increasingly attractive. To secure serious growth the Chancellor needs genuinely to deliver on making the UK more competitive than its rivals for that investment."

Stephen Robertson added: "The Government says it's backing business as the route to growth. But it has yet to deliver material change to the costs and difficulties of doing business. It must go further faster if the UK is to attract retail investment, create jobs and reinvigorate high streets. 

"The Chancellor must be bold in his quest for growth. Addressing our concerns is vital to securing the potential of the UK's biggest private sector employer. Quite simply, he must get on with it.

To read more click HERE