It isn’t just the weather that’s been gloomy for retailers this summer: sliding share prices and profit warnings have become a regular thing. Cue a study by the Centre for Economic and Business Research, which says things are unlikely to improve for another five years.
Admittedly, the report shows that spending will grow by 1.8% between now and 2018. But that works out at just 0.4% a year – not exactly enough to kick off a national shopping spree.
Apparently, consumers are worried that the government will begin another round of austerity measures, and are battening down the hatches in anticipation.
The CEBR’s solution is for the government to focus on attracting cash from outside the UK: we need more exports, higher investment in business and generally more productivity, it says.
Daniel Solomon, the lead author of the reports, says the ‘freefall in consumer spending seen during and immediately after the financial crisis has ended and retailers will be relieved that consumer spending is starting to rise again.
‘That said, consumption is expected to grow at a snail’s pace over the next six years. Retailers won’t be opening the champagne just yet.’
Of course, this is the exact opposite of a report by the Ernst & Young Item Club, which on Monday said consumers were poised on the edge of a return to their old shopaholic habits – but nevertheless. Perhaps the over-65s market is the answer. Another report, by the Institute for Fiscal Studies, reckons UK pensioners’ incomes have risen faster in the last 30 years than any other age group. In fact, they are the only age group to have seen their wages rise since the beginning of the financial crisis in 2007/08. Income among oldies has gone up by an average of 2-3%, compared with people in their 20s, which has dropped by 12%.
So with that in mind, are high streets about to see an explosion of sensible blouses? That could finally bring about the end of the crop top. It can’t happen too soon…
- Image credit: Flickr/MegMoggington