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Retailers will experience a significant decrease in the amount of money UK shoppers spend on the high street in 2007, new research says.

Nine out of ten consumers are planning to cut back over the next 12 months according to Accenture.

The management consultancy's survey says that the only retail sphere likely to see an upturn in fortunes is locally sourced food, with four-fifths of people planning to buy more ethically-produced goods.

But the underlying reason for cutbacks in 2007 is the rising cost of living in the Britain, with 89 per cent of respondents citing this concern.

Richard Wildman, head of Accenture's UK retail practice, said: "Our research indicates that consumers are planning to take a more cautious approach to spending in the next 12 months.

"The key for British retailers is to have a deep understanding of their customers to know where this perceived spending pressure will become a reality. Providing a differentiated service, product and value proposition will be the key success factor for British retailers this year."

Today's research is at odds with official data that showed retailers to have defied expectations by enjoying a healthy Christmas in terms of sales, with consumers spending 4.1 per cent more than the festive period of 2005.

The Christmas upturn in sales came about despite two interest rate rises in the latter half of 2006, while a further 0.25 percentage point increase to 5.25 per cent was announced by the Bank of England earlier this month.