It’s a little odd, isn’t it?
Of the three major indices for tracking retail sales, you have got two saying things are pretty dire, and one saying well, actually they are not too bad at all.
The thing is though, the index which boasts the most favourable findings is the official data, so thatâ€™s all right then.Â Â When in doubt, trust the Office for National Statistics â€“Â and what a relief.Â In the three months to April, retail sales were 1.5 per cent up on the previous three-month period.Â Â Â Okay, sales were down in April, but only by a tiny 0.2 per cent; besides, the bad weather probably explained that, anyway.
Relax, the crisis is not spreading to the High Street.
It is just that this is not what the retailers are saying.Â Recently, the most successful British retail entrepreneur of the lot, Philip Green, said conditions were the toughest he had ever experienced.Â Â Â Okay, M&S posted a healthy Â£1bn profit recently, but even for them the prognosis is not so good.
Unless your name is Tesco, or one of the other big three supermarkets, and possibly, unless your name is John Lewis, it appears retail is not a good place to be right now.
Yet, the ONS has the High Street staying steady.
The ONS reports that in April, household goods retailers saw sales jumpÂ 4 per cent.Â Â Surely that canâ€™t be right â€“ when the property market is in such a mess you would expect household goods retailers to be suffering too.Â Â Recently, ScS, one of those furniture retailers with those large out-of-town showrooms, had sales falling 11 per cent in April.
Even the Bank of England seems puzzled.Â The latest minutes from the MPC committee said: “According to the ONS, retail sales volumes had fallen by 0.4 per centÂ on the month in March, but that still left volumes 2.0 per cent higher for the quarter as a whole. Survey data from the British Retail Consortium and the CBI reported much weaker growth in sales. Reconciling these rather different pictures remained difficult.”
But then the Old Ladyâ€™s rate setting committee seemed to go all bearish: â€œBut surveys were giving a uniform signal and were consistent with reports from the Bankâ€™s regional Agents and consumer confidence measures,â€ said the Minutes.Â Â â€œSo it seemed sensible to place more weight than normal on these indicators relative to the official data in assessing the current state of consumer demand.â€
So, in other words, the ONS might have things looking rosy, but no one seems to believe them.
The same applies to ONS data on inflation.Â Recently, Justin King, head honcho at Sainsburyâ€™s, lambasted our official compiler of statistics for over-stating food inflation.
“They’re over-reading because they do not pick up the pricing activity of grocers fighting hard for market share and sales growth, they don’t pick up promotional activityÂ â€“ the market is much more promotional and has been now for six to nine months… and I don’t think they pick up things like vouchering activity,” King said. “Real inflation and therefore the real challenge in household budgets is perhaps less than is being reported.”
So does it matter?
The answer is yes, but if you listen, then it doesnâ€™t matter so much.
Official data always seems to lag behind reality.Â Â Â This is a problem because government policy is often based on official data.Â Â Â This is not new.Â The boomâ€“bust cycles of the past were in part made worse because governments were behind the curve.Â Â In reacting to data that was out of date, they pumped gas into the economy when they needed to be slowing things down, and slowed the economy when it needed gas.
Of course, the economic victory of the last few years was supposed to have been that our GordonÂ had licked boom and bust.
The reality, though, is far from that.Â But before policy makers can lick the economy back into shape, they first need to find statistics they can believe in.Â Â Maybe the key is to listen to what people are saying â€“Â and to take heed of anecdotal evidence.
© Investment & Business News 2013