British retailers are foreseeing tough market conditions to continue in 2010, a poll conducted by the British Retail Consortium revealed.

The BRC Concerns Snapshot Survey found four-out-of-five retailers believed sales would not improve year-on-year in 2010.

Retailers showed concerns over weak consumer demand due to rising unemployment plus the return of VAT to its pre-recession level of 17.5 per cent from January 1, 2010. Increase in VAT will encourage shoppers to spend less.

Speaking on the issue, BRC Director General Stephen Robertson said, "But factors such as weak consumer demand and rising unemployment are at the heart of retailers' concerns about how the recovery will pan out."

22 per cent of the respondents showed concerns over weak consumer demand, while 20 per cent said their main worry rising unemployment.

Separately, the British Chambers of Commerce found that two-thirds of company directors were considering salary cuts or pay freezes. Moreover, 18 per cent of the firms were planning not to provide their employees with benefits such as bonuses and gym membership in 2010.