British Retail Consortium chairman David Felwick this week said the industry was no longer able to absorb costs and deliver low prices as well as simultaneously boost innovation and investment.

At the BRC’s annual dinner, attended by Treasury chief secretary Paul Boateng, Felwick said the impact of competition and cost of regulation were being felt acutely, especially by smaller players. This year job creation in retail had fallen back for the first time in five years.

Government has shown a new willingness to work with retailers, he conceded, but “if we really do have a deal here, we expect something in return”.

He called for consultation on crime, planning and taxation as well as a reduction in “unnecessary” regulation.

The BRC used the event to launch a new group designed to tackle issues impacting trade in the capital. The London Retail Consortium, staffed by a team at the BRC and chaired by Selfridges CEO Peter Williams, will look at congestion charging, the downturn in tourism, retail crime and the transport infrastructure.

Separately, the government-backed Retail Strategy Group, announced at the BRC dinner last year, would shortly publish a discussion document outlining areas where retailers could work more closely with government to improve competitiveness, said the BRC. This would prompt a consultation from which formal proposals would be drawn up next spring.