Recession stalks the HIgh Street

I went to the shops today. In one leading retailer there was a queue at the returns counters where staff at three tills were busy refunding the money. Many tills in the leading stores were unmanned, and there was no queue at most of the other tills that were being used. There were not that many people out on the High Street, and those that were bnought a coffee and maybe ended up with just one bag of goods, or none. Lots of staff were standing around with nothing to do.

I bought some glasses because they were marked down by 60% from their usual price, putting them below the 50% off sale offers I have paid for in the past for similar merchandise. I had in my mind the question would there be further price cuts in the next sales? The deflationary psychology puts people off buying, as you think if you leave it it might get cheaper.

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  1. Tony Makara
    Posted October 19, 2008 at 4:52 pm | Permalink

    Back in the summer I was in the Manchester Arndale shopping centre with my son, not a ususal haunt of mine, but my boy wanted to buy a computer game. It was about eleven in the morning and it struck me as incredible that the steep escalator in the Arndale Centre was absolutely cram packed with shoppers, most of whom were carrying a multitude of bags. It was akin to the type of scene one expects to see in the final lead up to Christmas, but this was a run-of-the-mill Monday morning. I was witnessing a snapshot moment in history, the credit-boom, Gordon Brown's credit-boom, now Mr Redwood has paid witness to Gordon Brown's credit-bust, how quickly times have changed.

  2. oldtimer
    Posted October 19, 2008 at 5:30 pm | Permalink

    Where I live (large village of c9000 people in SEast) there are noticeably more empty offices/retail premises available to rent then even three months ago. I am also starting to see signs in windows of businesses announcing they will close down in the next few weeks.

  3. mikestallard
    Posted October 19, 2008 at 5:59 pm | Permalink

    It is so good to see an MP – of all people – who actually lives in the real world! Well done.

  4. Matthew Reynolds
    Posted October 19, 2008 at 9:41 pm | Permalink

    It just proves that things are getting pretty serious indeed and that 2% interest rates are needed to prevent a dire situation from getting any worse . John Redwood is right on all counts !

  5. Bazman
    Posted October 19, 2008 at 10:17 pm | Permalink

    They all live in the real world Mike. Count on it. Like Peter.

  6. Nick
    Posted October 19, 2008 at 11:25 pm | Permalink

    In reality, its is going to be people hoarding cash. The worst example I've come across recently is scrap metal. 250 a ton for steel down to 5 quid a ton.

    The problem is that the government can't reflate because it's run up so many debts. ie. We've had the Keynsian reflation over the labour governments time in power, and we've still got a recession.

    Why will another bout of borrow and spend cure the malaise?

  7. StevenL
    Posted October 19, 2008 at 11:32 pm | Permalink

    "I bought some glasses because they were marked down by 60% from their usual price …" (JR)

    You didn't fall for that old scam did you? I went to the shops on Saturday and bought nothing. I saw several DVD's I fancied and I need a new jacket. I saw two jackets I liked and a jumper. As usual I saw lots of shirts I wanted.

    However, I bought nothing. I'm terrible with money so I only use cash, I don't have a debit card, let alone any credit facilites. This way I can spend a couple of hours in House of Fraser without making myself skint, I simply walk in with no means to pay for anything.

    I'm pretty sure it's going to start getting colder, so I might have to buy myself a jacket this side of the January sales, the best ones all sell out before the discounting starts anyway.

    Tesco is the only place I have spent any money (besides bus fares, sandwiches for lunch and diesel) in this month. They've just had another £40 off me today for a weeks food shopping and 36 bottles of lager. I did see a jacket for £25 in Tesco, I thought about it for a moment but decided that I'm not that tightfisted.

    If I keep up the thrift I should end the month with at least £200 of my salary left, enough to buy one of those designer jackets in House of Fraser. Then it's back on the reduced lager (yes I fall for the half-price scams too) and cheap DVD's (I do wish they'd start putting something decent on the Tele) for another month while I save up to get my car serviced.

    What would we do without the internet?

    Reply: it was no scam – they are glasses they usually sell at the higher price, ones I have bought before at sale prices

  8. joe wilson
    Posted October 19, 2008 at 11:46 pm | Permalink

    For all the people in the country who are well off this should be a super christmas . January sales will have to be renamed sale of the century . Those with high finance mortgages , insecure employment , worthless shares , a creaking car to maintain , young children to clothe and feed may well feel we are back in the days of Charles Dickens .
    (Words left out)

  9. Stuart Fairney
    Posted October 20, 2008 at 8:38 am | Permalink

    One wonders how Mr Brown's proposed increased tax on small business can possibly be sane in current circumstances? (BBC not covered them again! Pravda much?) Then again, if you spend it, you need to get it from somewhere and they are borrowed to the absolute hilt, so I guess this is the first in another line of tax hikes for all of us. Thus a difficult economy may become a prolonged Rooseveltian recession. Add to the mix Senator Obama's obvious "tax and spend" ideology and (if he is elected) it could be interesting times in the next few years.

  10. Chuck Unsworth
    Posted October 20, 2008 at 8:48 pm | Permalink

    Christmas is going to be interesting. January will be very cold indeed, sales-wise. I suspect that February onwards we're going to see a huge shake out in the shopping malls – if it doesn't happen before.

  11. Derek
    Posted October 21, 2008 at 9:02 pm | Permalink

    I'm a director of a High St retail chain and can confirm that Mr Redwood most likely did purchase a bargain. There are certainly items on sale at the moment at genuinely below cost prices. This won't last as prices from the Far East are flying up and there'll be few genuine bargains in the January sale as stock forecasts have been adjusted accordingly. Most January sale stock will be brought in specially or will be half price unsold Christmas gift sets, both of which have plenty of margin in them.

    I won't add to the doom and gloom too much, but the brief bounce in sales from the bank rescue seems to have faded and credit card spending is the weakest I've ever known. We'll, most likely, have another big axe swing on staff in January and I suspect they know it. Extrapolate this realisation to the whole UK workforce (including Labour MPs) and it may be the reason we're in for a not very merry Christmas at all.

  12. bowie_uk
    Posted October 24, 2008 at 9:08 am | Permalink

    Wow! Could this mean an imminent end to the 'me, me, me, self, self,self' greed era? BRING IT ON!!

  13. scrap metal merchant
    Posted October 11, 2009 at 6:40 pm | Permalink

    agreed a MP in the real world excellent.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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