UK IT Spending Slowdown to Hit Retail Sector the Hardest

Investment in software and IT services (SITS) will fall in the UK in 2009, and the decline will be steepest in the retail sector.

London – March 5, 2009 – Software and IT services spending will suffer the most in the UK retail sector in 2009, according to figures just published by Pierre Audoin Consultants (PAC) in partnership with TechMarketView (TMV), the new venture of leading sector analysts Richard Holway and Anthony Miller.

While overall investment in software and IT services (SITS) is forecast to fall by 1% in 2009, PAC and TMV believe that spending in the retail sector will decline by 5.9% this year to reach a total of Ј2.77bn.

In contrast, the most robust UK market for SITS will be the public sector, where local government outsourcing programs and national security initiatives will help to drive a spending increase of 3.7% this year. Of the nine key vertical sectors tracked by PAC in the UK, only three are expected to experience a rise in SITS investment in 2009.

Some large UK retailers, such as Marks & Spencer and Morrisons, are pushing ahead with essential IT modernization programs, and there is a renewed interest in outsourcing from retail groups such as Phones4U as they look to reduce their operating costs. However, PAC expects UK retailers to slash or freeze their budgets for new applications software and IT project services, as they shelve expansion plans and focus on cost control.

Nick Mayes, Senior Consultant at PAC UK, said: “Dwindling consumer confidence coupled with the crisis in the financial markets has seen the disappearance of some of the country’s largest and best-known retail groups, which has led PAC to forecast that this sector will be one of the toughest for UK software and IT services players in the medium term.”

About Pierre Audoin Consultants (PAC):

PAC is a global market research and strategic consulting firm for the Software and IT Services Industry (SITSI). PAC helps IT vendors, CIOs, consultancies and investment firms by delivering analysis and advice to address a range of growth, technology, financial and operational issues.

Our 30+-year heritage in Europe – combined with our US presence and worldwide resources – forms the foundation of our ability to deliver in-depth knowledge of local IT markets, anywhere. We employ structured methodologies – undertaking thousands of annual face-to-face interviews on both the buy and sell side of the market, as well as a bottom-up, top-down approach – to leverage our research effectively.

PAC publishes a wide range of off-the-shelf and customized market reports –including our best-selling SITSI® program – in addition to our suite of strategic consulting and market planning services. Over 160 professionals in 16 offices –across all continents – are delivering the insight that can make a difference to your business.

For information on the article, please contact:

Nick Mayes
Senior Consultant
Tel: + 44 (0) 20 7553 3968

Press Contact:
Shelly Wills
Group Marketing Coordinator
Tel: +44 (0) 20 7251 2810

Source: PAC

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