According to the British Retail Consortium, shoppers have turned their backs on items like furniture, clothing and footwear. And the bad news for retailers is that the organisation reckons this is something they’ll just have to get used to.
Anyone thinking of drowning their sorrows should save a drop for Oddbins. The wine retailer is struggling to such an extent that it’s been forced to bring in corporate financiers to help devise a strategy. Its first step, announced today, is to close 39 stores - almost a third of its total. Oddbins is currently stuck in an ongoing and costly legal dispute with its former owner, the French wine producer Castel. Weak sales is the last thing it needs.
Sadly Oddbins isn’t alone in its suffering. The relentless message from a string of recent consumer confidence surveys is that households are too nervous about potential job losses to go out and spend money. And that mood’s only going to get worse as the raft of public sector redundancies kicks in.
And the gloom continues: the British Chamber of Commerce has posted a downgrade in its growth estimate for this year to 1.1%, half the 2.2% predicted by the government's Office for Budget Responsibility, pinning the blame on the increasing likelihood of interest rate rises.
Accountant PwC agrees: it reckons growth in 2011 will struggle to top 1.4%, and that the Bank of England should resist pressure to put rates up until we’re on stronger footing. It’s also warning retailers that recent cuts in spending were likely to become longer-term trends: with people forced to save more for heating and electricity bills, they’ve simply got less cash to splash on stuff like clothes and home furnishings.
Looks like George Osborne had better have something special in his red briefcase come Budget day on the 23 March. Good luck with that...