Retailers have a "very tough" 12 months in store despite reporting robust Christmas sales figures, the head of the industry's trade body has warned.
Stephen Robertson, the director general of the British Retail Consortium, predicted no growth in consumer spending over 2010 and indicated the recent glut of positive updates from the festive season may represent a false dawn.
"There will be increasing consumer uncertainty and we will see consumer confidence dropping. There will be tough sales and perhaps no growth," he told the Sunday Telegraph.
Echoing comments from retail bosses including Marks & Spencer's Sir Stuart Rose, Mr Robertson warned of the impact of tax rises and highlighted evidence that households were choosing to save more. He said many homeowners were also coming to the end of fixed-rate mortgage deals.
Lower interest rates boosted spending last year despite average earnings growth excluding bonuses of just 1.7%.
On Tuesday, the BRC is expected to reveal that sales for last month were at least 4% higher than in December 2008, a figure flattered by comparisons with depressed conditions last year and after some shoppers brought forward purchases ahead of the January 1 VAT increase.
House of Fraser will kick off a busy week for updates on Monday by reporting its best Christmas yet, with like-for-like sales likely to be in the upper single-digit range. This follows equally positive sales figures in the past week from Next, Sainsbury's and John Lewis, where sales rose 12.7% to more than £500 million over the five weeks to January 2.
The run of positive updates from the supermarket sector should also continue as Co-op is expected to unveil same-store growth of around 5% on Monday. A day later Tesco will report a rise of around 3.5% for Christmas and New Year. The supermarket giant has been outshone by its rivals in recent months but is likely to have cashed in on shoppers trading up to its premium Finest range.
However, analysts will be wary of the impact of an extra £100 million of loyalty vouchers given to customers before Christmas, a factor which could add a percentage point to the Tesco sales figure.
Other updates this week are expected from Primark owner Associated British Foods and Home Retail Group, which owns Argos and Homebase. Halfords, Mothercare, HMV, Dunelm, Topps Tiles, Debenhams and Currys owner DSG International are also expected to reveal figures.