Sir Tom Hunter, the billionaire entrepreneur who made his fortune on the high street, fears that the consumer slowdown buffeting the retail sector has only just begun and could last well into 2010.

Adding his name to a list of executives concerned about the fallout from the credit crunch, Sir Tom said that stores faced a much tougher environment over the coming year.

He said: “The credit crunch is just beginning to filter through to the consumer. Everybody is telling the consumer it's the end of the world and some of them are starting to believe it.

“The downturn could last two years, in my opinion. It could take two years for consumer confidence to begin to rebuild.”

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He added that despite the slowdown, consolidation could be some way off, given that private equity firms can no longer tap debt markets.

“The buyout model is finished for the time being,” Sir Tom said. “There's a lack of debt. The tap has been turned off.

"There's nothing on the horizon; as far as we're concerned, sellers are still not bringing prices down to the right levels. If opportunities come along, we will look at them.

Some of the best investments we make over the next decade could come in the next two years.”

Sir Tom, whose West Coast Capital vehicle runs Travelodge, the Qube shoe chain and USC fashion retailer, has become better known more recently for his philanthropic work.

He has pledged to donate £1 billion to good causes, placing him third in The Sunday Times Giving List.

His comments come amid growing fears that, despite a marked slowdown since the start of the year, which has forced nearly a dozen businesses into administration, 2009 could prove even tougher.

Last month Sir Stuart Rose said he believed that the downturn would run until 2010. Sir Philip Green described trading conditions as “horrible” recently.

Sir Tom, who sold his Sports Division business to JJB Sports for £290 million ten years ago, said that the retailers who survive will be those with great brands and a compelling proposition.

Despite his charitable work, which includes working with Bill Clinton to help Rwandan coffee growers, Sir Tom refused to criticise the financial institutions blamed for sparking the credit crisis through a rush into the sub-prime market: “The biggest lesson is that when you borrow, you have to pay it back. A lot of people forgot that.

"The other great lesson is about leverage: it's a fantastic model on the way up, but a very cruel one on the way down.”

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