Consumer spending is likely to be further curtailed next year following cutbacks announced in the government’s Spending Review yesterday.

Chancellor George Osborne revealed round 490,000 public sector jobs are likely to be lost, £7bn in welfare support would be cut, and regulated rail fares will rise 3% above inflation.

Shane Brennan, public affairs director of the Association of Convenience Stores, said: “There is no doubt that tough times are ahead. There is going to be significant change to the way government works and we don’t yet know what impact that will have on things that matter to retailers.”

Cuts to police funding – revealed to be 4% a year – is also concerning, added Brennan. “We worry about cutbacks in police funding because retail crime struggles to get attention so we need to work extra hard to keep things like drive-offs on the police agenda.”

One positive to be drawn from the Review is the government intends to spend more money on clamping down on duty avoidance through illegal trade of products such as tobacco and fuel.