Retail Sales Continue To Go Backwards (-3.9% 2010-11)

Nijmegen

Retail sales are continuing to go backwards, backwards and backwards. A colleague pointed out to me that electrical goods - stuff like laptops, for example - has gone back 50% vs 2007 at this point.

Amazing when you add it all up, and no surprise then that we've seen so many businesses go to the wall. I daresay more will, as we show absolutely no sign of a turnaround.

Unemployment isn't going up by the strides it was before, and I think that as time goes by we will see a more measurable rate at which 'confidence' alone is holding us back (the fear of things getting worse, tax going up, negative equity, etc).

I have yet to see a light at the end of the tunnel for consumers or retailers.

Tipp Man

We probably didn't need half the stuff we were buying in those years (think i might refuse to call it a boom from now on)

Electrical retailers in particular are unlikely to see their sales hit anything like they were in 2007 - the retailers that can best adapt to the current market are the ones that will survive

Nijmegen

Tipp Man wrote: »

We probably didn't need half the stuff we were buying in those years (think i might refuse to call it a boom from now on)

Electrical retailers in particular are unlikely to see their sales hit anything like they were in 2007 - the retailers that can best adapt to the current market are the ones that will survive

Much as that might be an idyllic argument (we don't buy what we don't need anymore), advanced societies are ones in which people consume for pleasure and comfort more than they live from subsistence, spending all their cash on the things they need to survive.

Think about everyone you've ever known and the jobs they have - from retail to the IT engineer who supports a logistics company that serves the company that makes one component of a popular item sold through the retailer... Well, not too many people actually work in the areas critical to our survival.

If people aren't consuming, there's no wealth creation or liquidity, and people can't get jobs, and the economy comes to a grinding halt... Much like ours.

lmimmfn

of course retail sales are down were getting taxed to f***, now pension tax, a few months home ownership tax, soon water rates for everyone, people dont have money because we have bondholders to pay.

PeteHeat

lmimmfn wrote: »

of course retail sales are down were getting taxed to f***, now pension tax, a few months home ownership tax, soon water rates for everyone, people dont have money because we have bondholders to pay.

Agreed, however with the number of small buisnesses closing or worse staying open without enough cash flow to provide the owners a living never mind after sales service our unemployment figures will keep rising.

We need more positivity amoung consumers and the above list is causing people not to spend even on essential goods and services.

Noreen1

PeteHeat wrote: »

Agreed, however with the number of small buisnesses closing or worse staying open without enough cash flow to provide the owners a living never mind after sales service our unemployment figures will keep rising.

We need more positivity amoung consumers and the above list is causing people not to spend even on essential goods and services.

What we actually need is a way of putting more cash in peoples pockets.
You cannot reduce a persons income by X percentage points, and expect them to continue to spend the same amount they spent previously.

All the hype in the world about consumer confidence will not change the fact that too many people no longer have money left after paying for essentials.

PeteHeat

Hi,

I am referring to essentials, we don't need or expect a repeat of the spending patterns of "previous years"

I have seen small local supermarkets being downgraded by partitioning off sections of the shop thus reducing shelf space, those who have not taken such measures are struggling to keep the shelves looking full when in fact there is only one line of essential consumables on the shelves.

Our consumers are not spending locally but as all are still living they must be buying essentials somewhere?

Noreen1

PeteHeat wrote: »

Hi,

I am referring to essentials, we don't need or expect a repeat of the spending patterns of "previous years"

I have seen small local supermarkets being downgraded by partitioning off sections of the shop thus reducing shelf space, those who have not taken such measures are struggling to keep the shelves looking full when in fact there is only one line of essential consumables on the shelves.

Our consumers are not spending locally but as all are still living they must be buying essentials somewhere?

I seem to remember reading that stores like Aldi and Lidl have substantially increased their sales since the recession began. I believe Primark are doing pretty well, too.
People are buying for "value".

All too often SME's cannot compete - hence the damage to the domestic economy.

The other point is that a new kitchen/heating system etc. can, in some cases, be "essential". That doesn't mean that it's affordable for everyone in the current climate, though!

johnnyskeleton

Noreen1 wrote:

What we actually need is a way of putting more cash in peoples pockets.
You cannot reduce a persons income by X percentage points, and expect them to continue to spend the same amount they spent previously.

All the hype in the world about consumer confidence will not change the fact that too many people no longer have money left after paying for essentials.

I agree with you that we need to find a way to put more cash in more people's pockets. But the way to do that is to increase productivity and jobs. Simply giving people the money (or not cutting their wages) is not the same as spending based on genuine productivity increases.

PeteHeat

Noreen1 wrote: »

I seem to remember reading that stores like Aldi and Lidl have substantially increased their sales since the recession began. I believe Primark are doing pretty well, too.
People are buying for "value".

All too often SME's cannot compete - hence the damage to the domestic economy.

The other point is that a new kitchen/heating system etc. can, in some cases, be "essential". That doesn't mean that it's affordable for everyone in the current climate, though!

I think you will find that all of the major outlets who are supplying lifes essentials like food and clothing are working on turn over and making their profits from the cash deposits and extended payment terms with their suppliers.

There is nothing new with that practice we provided services to some of the multiples over 20 years ago, the managers were always under pressure on the late opening nights to ensure the cash was in transit (with the security company) to ensure the lodgement hit the bank before 12 midnight because the group would lose a days interest if the money arrived after 12.

Aldi & Lidl have taken the cash issue a step further by refusing credit cards, hence no merchant charges.

You will also find many are dividing up their shopping basket with the best value from every large retailer, there's nothing wrong with that for those who have the time to get the best value.

I am involved with more than one buisness, one outlet was offering goods below factory cost (yes losing money on every sale) the prices could not be beaten anywhere in Europe, in the end we sold the stock to a UK retailer for more than we were offering them to the Irish consumer.

We provide essential services such as waterproofing and heating, many allowed their systems go without service and others closed off rooms rather than have the roofs repaired.

Every customer was not broke, some openly stated they were holding on to the funds they had because they could not be sure they could borrow from the bank if they ran into financial difficulties.

Confidence in the future is vital for all consumers the levels of negative reporting has left all consumers (I am one too) punch drunk, the consumers wants and even needs are being left until they see a future secure enough before they touch their savings.

Noreen1

johnnyskeleton wrote: »

I agree with you that we need to find a way to put more cash in more people's pockets. But the way to do that is to increase productivity and jobs. Simply giving people the money (or not cutting their wages) is not the same as spending based on genuine productivity increases.

That's why I said this:

Noreen1 wrote: »

Pre the bank guarantees, the answer would have been a government backed stimulus plan.
Since that is not an option, given the ridiculous cost of borrowing/the atrocious lack of foresight during the "boom" - the only option, now, would appear to be an employment strategy.

Unfortunately, what passes for an employment strategy appears to be a "free labour" scheme, that neither increases the Government tax take, reduces the Welfare bill, or creates any extra income to spend in the real economy.

More employment reduces the Welfare bill, increases the PAYE take, and leaves people with cash to spend in the local economy, creating more jobs, less welfare etc.

My criticism of the Governments employment strategy is that it achieves none of the above.

I'm aware that SMEs throughout the Country are struggling to survive - and I fully support assisting them. Rent, rates, and energy costs are three areas that need to be addressed urgently imo.
Tax breaks could also be investigated.

I'm aware that this would initially cost money - but I don't believe that it's impossible to do a cost/benefit analysis, and co-ordinate a plan based on the results.

My point is that it is impossible to grow a business if your potential customers can't afford to buy your product.
Therefore, we need to help SMEs to grow our economy - but providing them with labour paid for by the Government, at welfare rates will not do that.

Instead, we need to forget the "Cutting social welfare and the PS pay bill is the only way forward, together with reducing the minimum wage"(though I'm not saying that savings couldn't be achieved in these areas).........and look at all the options.(Quangos included).

Exports are growing, and that's great - but the SMEs are the backbone of the economy, and the less money people have to apend in the local economy, the more of them will go to the wall, no matter how much "free" labour they get.
Thsi is the sector that the Government is failing, and failing badly.