Something odd happened in January. Something that some may find hard to believe, and yet it really does seem as if this odd thing happened. The High Street did well.
So, let’s run that one past you again. Woolworths went, so did Zavvi, a chain of other stores are on the brink, and yet, shoppers shopped the shops, shocking statisticians, stoking sales that sloped upwards, showing success.
How can it be?
According to the Office for National Statistics (ONS), retail sales rose by 0.7 per cent in January, and by 1.7 per cent in December. Normally, when the ONS reveals stats like that, analysts raise their eyebrows, look upwards in a sign of exasperation, and utter something about lies, damned lies and…
It is just that yesterday, the CBI came out with its latest distributive trades survey, and, well, we are jiggered, it only went along and suggested a surge too.
The CBI index for tracking the sales balance, that’s the one that takes the percentage number who said down on last year away from the percentage number who said up, rose to its highest level since last June.
Mind, you the index is still in negative territory – minus 25 – so don’t go out and start proclaiming a High Street boom yet. But it is all a tad odd.
Maybe there was an element of listening to the band on the Titanic as she sinks about it. Maybe consumers felt, well, we know 2009 is going to be tough, but let’s have a good time while we can. Maybe it was simply that prices were discounted by so much, consumers found them irresistible.
It does seem that British consumers are in no hurry to change the habits of the last ten years or so, or maybe longer, and start practising the art of prudence again.
There are those who believe the underlying problem in the UK is a lack of saving. And that as we finally correct this, and start saving more, the economy will automatically suffer as consumer spending falls. This in turn may of course lead to job losses, and lead to an overall contraction in saving – which all rather spells paradox.
It does seem that, at the moment, the UK is rather reliant on us all spending as much as possible. The only way the economy can remain healthy is by us all doing the one thing that, really, we shouldn’t do, which is spend more than we have.
PS – read the second paragraph of this article again – aloud – and then answer this question…
…What do you do when you reach a green light?
© Investment & Business News 2013