Retail industry leaders are downbeat about the prospects for the High Street over the next twelve months. According to a survey of over 180 senior retail executives at Barclays fifth annual Retail Industry Forum held in London on Thursday, 50 per cent of retailers feel pessimistic or very pessimistic about the outlook for the retail sector for the next 12 months, with only 13 per cent remaining positive, the remainder being neutral.

50 per cent of retailers feel that the prospects for trading this Christmas are poor or very poor, compared to 2004, with only 10 per cent of those surveyed predicting that trading this Christmas will be good. Just over half (51%) of those surveyed anticipate that they may need to go on sale in the week before Christmas with the remainder not intending to do so until the New Year. Three quarters of those surveyed believe that retail prices are set to fall further in the next six months. The general feeling is that prices will fall up to 5 per cent.

While 2005 was somewhat quieter for leveraged transactions, the expectation is that private equity investment in the retail sector will improve in 2006. 34% of retailers surveyed think private equity investment in the retail sector will improve in 2006, whilst 46% think it will remain similar to 2005 levels. Paul Clarke, National Director, Retail and Wholesale sectors, Barclays says: "The survey results are not a surprise. These are tough times for the retail sector but Barclays is very supportive of its customers and we understand the challenges and issues they currently face. Barclays' industry expertise has been useful in seeking solutions going forward. However, it is not all gloom and doom - it is important to recognise that many retailers are showing remarkable resilience.

"The retail sector is entering the crucial Christmas trading period in a less confident mood than in recent years with doubts lingering about the strength of consumer spending. With the dollar likely to strengthen further retailers should be taking a good look at their foreign exchange risk management strategies."