Retail sales in the Uk fell by 1.3% in April. Yesterday figures imply a further deterioration in May. Retailers reported a worse balance between those experiencing rising sales and those with falling turnover.
The squeeze on incomes has curbed some of our spending in the shops. We also now as a nation buy more on the web and less in the stores. Love of hi tec gadgets on broadband and a love of holidays takes money away from High Street clothes shops and from homewares and other domestic goods. We are changing our spending priorities in ways which hit traditional shops, and changing the way we buy which diverts from the High Street.
Speciality shopping now for many is a less frequent outing, probably including a coffee or a some fast food as part of the half day out. The daily or weekly grocery shop may still involve driving to the local supermarket, or placing an order of the web. It does not usually mean finding a High Street with a butcher, a baker and a greengrocer.
Trying to learn more about the state of the UK economy from the retail figures requires adjustment for changing fashions, tastes and technologies. It seems that the Uk economy is growing again, but the shops on many High Streets are having to compete with other ways of spending it and other uses for our money.
It was interesting to see the EU Commission at last recognise that the continuing deep recession in parts of Euroland is unacceptable. What a pity they do not have policies to tackle the mass unemployment of young people they have helped create.
May 30, 2013
As you say “What a pity they do not have policies to tackle the mass unemployment of young people they have helped create”.
Indeed and the EU still have the policies to continue to make matters far worse. The long lasting damage done to these countries and the tragic waste (or leaving) of young talent is totally appalling.
Retail shops have suffered hugely from the squeeze on pay in the private sector, caused by anti business policies and uncontrolled immigration undercutting workers pay. Also the huge increases in taxes to absurd levels, the deliberate LEA road blocking (with bus and bike lanes, islands and red lights nonsense), the motorist mugging in towns and villages by the local authorities and the absurdly high rates shops have to pay (even when empty or making nothing). Much is used to fund LEA pensions which are perhaps about 10 times those that the private sector workers, who have to pay them, can ever look forwards to.
The bloated state sector is the main problem, it is twice the size needed and does so little of any real use. £37Bn on the Afghan war for example, and for what exactly?
June 1, 2013
Twice the size? Then you should easily tell us what can be cut in half. The Afgahan war would not be half. NHS maybe? Benefits? Infrastructure cuts. This is what you mean and would need to cut half. We are not the Cayman islands.
May 30, 2013
Yet some big ticket items, such as cars, have seen increased sales.
May 30, 2013
The death of the High Street is not just because of the internet, retail parks or the general health of the economy but because local councils have sucked the life-blood out of the town centres by way of using motorists as cash-cows, and HMG shares some blame, due to the high fuel duties which in turn is now causing people to move their shopping on-line even more.
May 30, 2013
And let us not forget business rates – which councils have constantly increased for years. They are now a massive overhead for all high street shops. I fail to see how any run of the mill high street shop can be profitable paying rents of 30k to 50k a year and business rates of 10k to 20k a year. You have to sell a lot of goods to make 70k profit just to pay the landlord and the council.
Meanwhile, major internet retailers base all their operations in one mega warehouse, base themselves in a lower tax country and put our small businesses out of business.
And the government sits by, wrings its hand and says ‘the times, they are a’changin”
May 30, 2013
Mike–Which genius thought up Business Rates in the first place? Just as with Employer’s NI, I see no sensible basis for them. If anything, the powers that be should be paying the business owner, especially the SME’s, not the other way round, for the enormous and increasing amount of work and responsibility they are compelled to undertake for the Government–Pensions, PAYE, Maternity Leave, inability to fire and therefore hire, Diversity, Male/Female Identity etc. Even forgetting the last sentence a shop doesn’t cost the local Council anything like the amount of Business Rates and it is no wonder so many are boarded up.
May 31, 2013
I suspect Business Rates and Employer’s NI were introduced because they’re hard to avoid.
May 30, 2013
One of the reasons my money stays in my pocket on shopping trips is the lack of anything worth buying. Variety equates to shops full of tat.
Bartering enables price equality with the web and is more engaging than clicking a mouse. High streets are most hamstrung by parking charges and an unpleasant environment (including the weather) which makes shopping centres more attractive.
Lower business rates (online giants not rerouting profits to avoid taxes too), flexible pricing, niche marketing and beautification would equalise the game on the high street. My local area has huge footfall (although not all with bags) Brits would rather take their kids to the shops than to a museum or park.
May 30, 2013
Meanwhile we read in today’s Telegraph: “The European Commission is taking Britain to court over accusations it is denying some immigrants their right to claim benefits.” I don’t think we can afford to wait till 2017(in the unlikely event of a future Conservative government) we need to start the process of leaving this anti-democratic organisation now.
May 30, 2013
The EU is taking the UK to court because under EU law you can’t deny benefits to members of the EU that are available to the natives of this country (especially when the EU citizens have worked and paid taxes in this EU country). I don’t imagine the UK will win this court case.
May 30, 2013
I suggest High Street retailers introduce late night shopping on one weekday so those working elsewhere can shop locally other than a Saturday. Sole traders would need to close at another time in compensation. Food and entertainment outlets should be open at the same time, and in combination bring life to the High Street at least on one evening during the week.
Away from the metropolitan South-East life does retain some of its old-fashioned charm. Living on the edge of a small town in Herefordshire I can walk to the High Street in ten minutes where I will find three butchers, two bakers, two greengrocers, two hardware shops, and a Co-Op.
May 30, 2013
Despite living locally, I NEVER go into Wokingham to shop. I will not pay the parking charges or put myself at risk of draconian fines if I stay too long in a car park.
Now, if we had a bus service …
May 30, 2013
I do most of my shopping in Wokingham, always travelling in by bus. The main problem with buses in Wokingham is busses during the evening. This means that many people are cut off from evening activities.
May 30, 2013
Yes we are buying online at Amazon which then declares its profits in Ireland…great.
The weather is also killing off sales.
May 30, 2013
My wifes shop has had its rent increased, business rates increased and the utilities increased. All of which are direct or inderectly attributable to government.
She now has to take £1000 per week before making anything like a profit. Takings are down and overheads are up year on year. Costs bear no relationship to profitability.
7 adjoining shops are now closed.
May 30, 2013
Exactly a largely parasitic state sector is killing retail and business in general with taxes and parking restrictions, this on top of the the move to online shopping.
May 30, 2013
Since I moved into my present home, the following shops have gone from our high street – 2 butchers, a greengrocer, 2 grocers, an electrical & TV shop, a menswear shop, Woolworth, Blockbuster and most recently our only baker. With the supermarkets and major electrical retailers now being out of town, and a limit on the number of coffee shops that the town can support, I cannot see that it reasonable to expect new shops to fill the vacant premises. What will they sell that isn’t already being sold at the supermarkets, and with declining number of shoppers on the high street, would they get enough customers? People should face the facts and start thinking about other uses for our high streets other than shops.
May 30, 2013
Since the smoking ban combined with atrocious weather, I find less need for so many new clothes. The high street shops have suffered as well as the pubs.
May 30, 2013
Too many towns have struggled to ‘give up the ghost’ of their shopping areas – they cling on in the hope that all one time retail sites will be so again – result – empty properties.
Time has come to ‘narrow down’ the shopping areas in our town centres – the lost areas could then become commercial (offices) or residential.
Stockport – our home town – refuses to face up to this. Result – dereliction and decline.
Moi ? – still shops at the local market and the town centre – for comestibles and toiletries. Alas, more specialist shopping – XXXL Menswear and ‘loud’ self-tie bow ties – has to be done online. No shops cater for us locally !
May 30, 2013
Every high st shop needs a corresponding online shop with staff trained to look after the website and used to dispatch orders so they are being used in the quiet periods.
Try before you buy is still important but shops need to have a foot in both areas – using the likes of Amazon and ebay to get the sales moving and building up email lists for future sales.
The ones that do this to effect will prosper, the people that don’t will eventually disappear – ecommerce is not going away.
For what its worth I HATE shopping, if I can find something online I will.
May 30, 2013
In May I believe part of the problem has been that for many monthly paid staff it is a five week pay month (following a holiday month – Easter fortnight). Extra holidays means more spending entertaining children etc. so less money to spend on products. When credit was easy to obtain and overtime plentiful the impact of these things don’t show up as much but when hours are cut through lack of demand and more people spend their holiday money outside the UK the bucket keeps emptying and doesn’t refill as quickly.
I rarely internet shop but my husband does nearly all his spending on-line, he uses Amazon – I wouldn’t out of principle – I want to support UK tax paying businesses predominantly.
May 30, 2013
Mike Wilson is so right; business rates are literally a killer for local SME’s and unlike rents do not appear to be governed by any sort of market supply/demand logic. I’m no “Queen of Shops”, but unless we tackle councils punch drunk attitude towards local businesses the High Street faces a bleak future.
Even bigger operators like Lohn Lewis and Sainsbury’s et al are starting to lobby this issue. Rightly so; there is no level playing field vs major internet offshore retailers.
An overhaul of business rates is long overdue.
May 30, 2013
The growth in the UK economy, such as it is, is in the service sector and in the public sector. I’m not sure if we should expect that to translate into retail sales growth. There is a quite commendable desire by households to reduce their debt levels. Sluggish retail sales and mortgage markets are a sign of that. Also, people are probably reacting to the continuing large public sector deficit; the longer it lasts, the more likely are increased inflation and increased taxes, so less to spend for them.
As for the Euro Zone, the weaker Member States must put up with prolonged austerity, or default, or leave the Euro zone. Under the prolonged austerity option, Greece public sector debt is not expected to reach its zenith (perhaps not the right word) until 2022. You may as well say until the 12th of never. There are those who say that Germany and the other wealthy Eurozone countries must make transfer payments or allow the ECB to print money and buy PIIGS bonds. The German electorate says ‘no’.
May 30, 2013
Part of the reason why high street spending is down is due to all the benefit cuts that have been introduced (due to inflation a 1% rise in benefits is a 2% cut in real terms). When the UK has 500,000 people going to food banks because they can no longer afford to buy food it shouldn’t surprise anyone that high street sales have fallen.
http://www.independent.co.uk/news/uk/politics/hungry-britain-welfare-cuts-leave-more-than-500000-people-forced-to-use-food-banks-warns-oxfam-8636743.html
It was interesting to see the EU Commission at last recognise that the continuing deep recession in parts of Euroland is unacceptable. What a pity they do not have policies to tackle the mass unemployment of young people they have helped create.
I thought this was due to the 2008 financial crisis caused by the banks. I trust you’re not blaming youth unemployment on the EU’s austerity plans while ignoring the effects the UK Government’s austerity plans have had on youth unemployment.
May 31, 2013
How many times do you need telling that the 2008 financial crisis was caused not by the banks but by our stupid government bailing them out? By not sending administrators into RBS and HBOS to do due dilligence, Gordon Brown paid twice as much for the shares as he needed to, at taxpayer expense. The fact that the shares are now recovering is irrelevant.
Incidentally, if you think that the financial crisis is over, read Liam Halligan’s article in the Sunday Telegraph of May 19th, entitled ‘Markets are on a crazy, sugar fuelled journey’. His argument is that recent surges in stock exchange indices, including the FTSE, have been caused by QE and easy money.
“….QE has become an open-ended life-support mechanism for living-dead ‘zombie banks’, a mask to cover up financial wrong doing. It’s also a comfort blanket for politicians, allowing most of them to delay the really tough fiscal decisions.
Money printing on the scale we’ve seen has gone way, way beyond a necessary palliative and been transformed from legitimate temporary measure into lifestyle choice – the economic equivalent of crack cocaine…..”
May 30, 2013
Your party, the Modern Party (former Conservatives), have been in power too long to blame others. It’s YOUR economy & your cohort will reap the whirlwind!