Although the latest high street sales don't look too scary - a 0.5% like-for-like jump on this time last year - that headline rise actually conceals a slightly more worrying picture. For a start, it's the lowest growth rate since April, and represents a sharp drop from the June figure. More significantly, sales of many more expensive items were actually down on last year. Throw in an apparent drop in holiday bookings, and it all suggests that customers are being increasingly careful with their cash - bad news not only for the high street, but the economy as a whole. The Government's imminent spending squeeze is going to hurt across the board, not just in the public sector - unless, perhaps, you're a credit rating agency...
According to the British Retail Consortium's latest figures, sales did rise last month - but largely because food retailers profited from the hot weather and higher prices. But generally speaking, the boost provided by the World Cup seems to have gone the same way as England's reputation. For non-food retailers, sales were basically flat, while they made less money from the pricier 'big ticket' items - like carpets, furniture and so on - than they did this last time last year (even online sales saw their weakest growth for almost 12 months). It's been a similar story for travel operator Tui, which said today that its UK holiday bookings were well down on last summer.
All of which points to an environment where shoppers are increasingly shying away from expensive purchases and focusing on essentials. That's really no surprise: with more austerity measures on the horizon, and many people (particularly civil servants) still worried about their jobs, it's no wonder people are being a bit more careful with their spending. But that doesn't bode well for retailers. And many will find life even more difficult in the coming year, as input costs rise (pasty-maker Greggs warned today that pricier wheat could hurt its still-steaming profits) and the VAT hike kicks in.
Economic policy is a bit like Whac-a-Mole - as soon as you knock one problem on the head, another one pops up somewhere else. So as the Government takes the axe to public spending, the knock-on effects could well include lower high street spending (because of the rise in unemployment) and more trouble for the private sector firms who have become heavily reliant on Government money - for example in the construction, housing and care homes businesses.
Controversially, one of the few winners looks like being Experian and our other much-loved credit rating agencies, who are apparently set to play a big role in the crackdown on benefit fraud. We suppose this makes sense (after all, the private sector already uses them for similar purposes), but it might stick in the craw to see companies like this profit from the forthcoming squeeze.
Still, if it gets too depressing, we can always emigrate to South Australia - the local tourist board is apparently trying to woo disgruntled Brits to come and catch koalas/ taste beer/ profile sharks/ sow corks onto hats (and we only made up one of those). At least there you'd get a hot weather boost for more than a few weeks a year...
In today's bulletin:
Slowdown in big ticket sales points to more economic gloom
Shareholders buzzing as International Power seals French connection
Is IPO plan just pie in the Skype?
Business travel is back, says InterContinental
FSA workers jump before Osborne pushes them