The retail industry has called on Chancellor George Osborne to save the crisis-hit sector by reducing business rates and rebuilding consumer confidence, as he prepares to present the Budget.

In pre-budget research prepared by Oxford Economics, the British Retail Consortium (BRC) claims that the cost of running retail businesses on the UK high street has risen by 21 percent or £20bn ($31bn, €23bn) since 2006 to £116bn.

During the same period, sales on the high street rose by just 12 percent, resulting in a significant cut in retailers' profit margins. The large-scale cost increases forced many retailers to close their shops, making thousands of jobs redundant.

A number of high-profile retailers including Comet, HMV and Jessops have failed over recent months, amid weak consumer confidence due to lower disposable incomes.

"While many private sector, market-sensitive costs such as rents have responded to economic realities, centrally-driven costs such as business rates and utility bills have gone up sharply," the BRC said in a statement.

"Consumer spending accounts for two thirds of all expenditure in the UK. It must recover before the economy can, yet 2013 has begun with high-profile evidence that demand is weak and a painful restructuring of the UK retail industry is underway as customers change the ways in which they want to shop," Helen Dickinson, the Consortium's director-general, added.

"The Chancellor has the opportunity to improve the business environment as a way of re-establishing and maximising retail's essential contribution to recovery. We're setting out priorities to help achieve that most effectively."

The BRC has asked Osborne to freeze business rates, at which retailers are taxed on their property assets, until 2013. Additionally, the group has demanded a system to calculate rates by using an annual average of the consumer price index, rather than a single month's retail price index.