OK, so technically October retail sales were marginally down on September’s figure (by 0.1%). But that’s still a much healthier picture than everyone was expecting – most analysts were predicting a drop of 0.9%, in the belief that the deepening gloom was driving even more shoppers from the high street. But it will clearly take a lot to stop us Brits shopping – in fact, today’s figures revealed that retail sales last quarter were 2.2% up on the same period last year. But the question is: at what cost...?
Of course, as with all these figures, it depends on how you look at it: the glass-half-empty brigade will point out that this is the second consecutive drop in sales, after months of apparently unstoppable growth. And the cynics will also see this as further evidence that the ONS figures are a load of rubbish – that they bear no relation to the true carnage on the high street. Compare the British Retail Consortium, which released its own figures for October retail sales last week: on a like-for like basis, it found a 2.2% drop on last year, with only food, drink and online sales showing any signs of growth.
And it’s certainly true that retailers are finding it tough, if the current rash of November sales is anything to go by. Today, M&S is holding a 20%-off one-day sale on all its non-food items, in a bid to woo some early Christmas shoppers. Debenhams is also holding a three-day sale, while Sir Philip Green’s various Arcadia stores are also offering big discounts. So they’re all scrapping hard for our money. And if this has propped up sales to some extent, it will come at a price: all this money that they’re spending on marketing and discounting will take a big chunk out of their profit margins.
On the other hand, let’s look on the bright side: at least people are still shopping and still spending – and that’s a rare bit of good news for retailers, particularly because it suggests Christmas might not be as big a disaster as many were predicting. It’s also good news for the economy, which relies heavily on people frittering away their wages on things that they really want but don’t really need. In fact, so crucial is consumer spending that we heard one expert suggest this weekend that the Government could solve our current woes at a stroke by giving everyone £100 of shopping vouchers, to be spent in the next few months. This might sound daft, but Taiwan is about to do exactly that in a bid to boost its economy.
Somehow though, we suspect more interest rate cuts are a bit more likely...
P.S. Our local M&S was absolutely packed at lunchtime, if that's anything to go by...
In today's bulletin:
Britons not dropping and still shopping
Another 3,000 jobs to go at Rolls-Royce and AstraZeneca
Don't be greedy, be succeedy
Have dinner with Leighton and Rose on the LSC
Competition: Win two FREE business class flights with bmi