Outlook Retailers and economists alike were falling over themselves yesterday to warn that the April surge in retail sales recorded by the Office for National Statistics should not be taken as a signal the high street is returning to health.
One can see their point because last month was unusual. It included two bank holiday weekends and the best spell of April weather for as long as anyone can remember. No wonder shoppers went on a bit of a splurge.
The fear is that consumer spending – buffeted by all the headwinds we know about, from rising inflation to the Government's austerity measures – will fall back into the pattern seen during the first three months of the year, when it was flat at best.
It would be foolish to dismiss such fears. But there are one or two reasons to think the outlook for consumers might not be quite so depressing as received wisdom currently has it.
One of these is psychological. The fear of bad news to come is often worse than the news that actually arrives, which can sometimes be liberating. For example, public sector workers have been operating under the threat of mass dismissal for a year, but most of them now know whether or not their jobs are safe. Similarly, until the Budget just gone, people thought another round of tax rises might follow those unveiled in last year's emergency Budget. In the end, the pain was limited. Consumers at least have a little more certainty about what lies ahead.
Also, the headline figures on the economy are confusing. Construction companies, for instance, do not accept the picture painted by the cataclysmic official statistics on their performance. Employment appears to be rising more quickly than makes sense given the GDP numbers.
Finally, fortunes are wildly divergent around Britain. Retailers with exposure to recovering areas will trade better than those stuck in more depressed regions.
None of which is to say the good times are back for retailers. But just as we should be careful about celebrating yesterday's figures, so we should avoid falling into the trap of assuming doom lies ahead.Reuse content