The downturn in the UK heralds the middle of a period of “lengthy reform” of the country’s retail market, analysts said today (7 May).

Industry watchers Verdict Research said the UK retail market will be “at its weakest” this year and forecast that sales would dip 0.6% during 2009.

Non-food spending will fare worse than grocery, with Verdict predicting sales in that sector to fall 3% this year.

Rising unemployment in the UK is behind the weak retail sector, Malcolm Pinkerton, senior research analyst at Verdict, said.

“Unemployment will not peak until late in 2010, as cutbacks continue to spread outwards from the financial sector, in which the credit crisis began, to affect all areas of the UK workforce,” Pinkerton said. “Both actual unemployment and the looming threat of it act as the ultimate dampeners to consumer spending, so the worst is truly yet to come.”

Verdict forecast that the UK retail sector will grow by 8.1% between its level in 2008 and 2013. The researchers said that growth was a “massive drop” compared to an increase of 14.1% between 2003 and 2008.

“The good news though is that survivors will find themselves in a far less competitive environment, with major opportunities for market share gains and winning new customers,” Verdict said.