Friday, January 18, 2008
Not a happy Christmas
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

Retail sales fell by 0.4% last month, in spite of some heavy discounting by stores. Sales in the latest three months showed a rise of just 0.4% on the previous three months. Department stores appear to be having a particularly grim time, their worst since 1994. Details here.


Do these numbers include internet shopping? If not, I just don't buy them as a barometer for the nation's economic health.

No to overstate an anecdote, but many people I know did most of their Christmas shopping over the internet. Until these numbers are counted, then high st sales figures are meaningless.


Posted by: Tom at January 18, 2008 12:41 PM

Sorry to disappoint you, but yes - they include internet sales.

Posted by: Sell Everything at January 18, 2008 02:14 PM

You are quite right. One minor possibility is that the sample used for the index does not keep pace with the rapid rise in the number of internet retailers, particularly smaller ones.

Posted by: David Smith at January 18, 2008 02:42 PM

If you follow the link from David's posting to the ONS nugget, then follow the links to the first release, you will see that non-store retailing and repair shows a 15.1% annual volume rise, compared with non-specialised stores up 4.9%. Textile, clothing and footwear up 1% and food stores up 0.9%.

By value, not seasonally adjusted, there is a 10% rise for the non-store retail and repair, 2.4% for food, 2.3% for 'other' and everything else is down (2.1% for household goods).

Posted by: paulbiv at January 18, 2008 07:35 PM

It's just the beginning - the first signs of what's to come. If you look at the shares prices of the housebuilders, you'll see what the markets believe is in store for the UK property market. Commercial property is already on the ropes. The momentum is increasing now, and recession is on the cards - falling asset prices, falling consumption, and then the final support goes and unemployment starts to rise. The vbicious cycle begins.

You can not build an economy on ever increasing levels of debt. It works while there is rampant asset price inflation, but not when asset price deflation has set in (as it surely has).

Poor Darling - no fiscal stimulous available; in fact taxes should be increasing now! Only route left is to plead with the Bank to ignore the build up of inflationary pressure and lower rates. Sterling must be sacrificed or the thing is going to get very nasty.

Clearly what the UK needs is a revised method for measuring inflation so that we can get the rates down even further and encourage the great British public to take on more debt. That's the only way out. Problem is though, the banks will not be so generous with their credit scoring this time round.

The British public are about to wake up from a ten year long dream-fantasy.

Posted by: T Gumbrell at January 18, 2008 09:06 PM

Get a grip. A modest fall of 0.4% in retail sales, which if past patterns are anything to go by will be followed by a rise next month, and you start ranting on about Armageddon. If you're so concerned about debt you should celebrate the fact that shoppers did not go crazy over Christmas. And, of course, the fact that aggressive price cuts by retailers confirm that we remain very much in a low-inflation era.

Posted by: David Smith at January 18, 2008 10:00 PM

"get the rates down even further and encourage the great British public to take on more debt. That's the only way out."

So the only way out of a debt problem is more debt?! That's an novel way of thinking about it.

Posted by: Sell Everything at January 19, 2008 09:35 AM

To be fair, I think that was ironic.

Posted by: David Smith at January 19, 2008 10:09 AM

David Smith:
"One minor possibility is that the sample used for the index does not keep pace with the rapid rise in the number of internet retailers"

Quite agree. The ONS is understandably somewhat behind the curve on this. But does this excuse internet sales by supermarkets still being reported as food sales? I bet the majority aren't.

Posted by: Mark at January 19, 2008 11:14 PM

I run a retail biz. Speciality shops in Major shopping desinations.
Totally discretionary luxury products.

Here are my figures:

Scotland 15% down
North 2% down
Midlands flat
South East 10% up
Internet 200% up ( but from a low base - that rise only cover the fall from ones store in Scotland)

Overall Like for Like 1.3% up

Yes there was a massive rise in web shopping, but its only really the equivalent to one busy bricks & mortar store. Most web sales from south east.


PS - Very major shopping centre in South East showed 4% like for like sales falls for whole mall in December, so there are problems everywhere.

Posted by: auditor at January 20, 2008 08:54 PM
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