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Consumer spending 'to impact upon' retail investment

12 December 2007 / by None
The retail sector will experience great "challenges" in 2008 despite current consumer resilience to the present unpredictable financial environment, an expert has predicted.

Big ticket retailers, especially those with high operational gearing, will be most at risk, according to Peter McLoughlin of Santander Asset Management UK.

He suggested that a recession had been fended off by low unemployment, rising incomes and a fairly strong housing market, though the latter would feel the pinch in the coming months.

"The most exposed stocks - mainly DIY, electricals and homeware - are likely to experience the biggest challenges," he said.

Richard Dodd, head of media and campaigns for the British Retail Consortium, said that Christmas spending would provide a welcome boost for retailers.

The organisation said that this year's festive buying was worth £12 million to retailers, a five per cent increase on last year.

He added that while internet spending was increasing, the majority of spending was still on the high street.

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