James Moore: Sunshine that hides clouds over retailing
Outlook: Consumers are still shying away from big-ticket purchases
Tuesday 14 July 2009
So it seems that the hot weather has offered planet retail a breath of fresh air. Yesterday's figures from the British Retail Consortium reflected the sunny weather that Britons basked in last month, with almost every sector reporting increasing sales.
Almost, that is. It is interesting to note that consumers are still shying away from big-ticket purchases. Lots of food and booze for the barby is being sold but no one is thinking much about new cookers, or new sofas, washing machines, or major household items that involve substantial financial commitments .
Before anyone starts talking about those fabled green shoots, it is worth talking to the people who are called in to sort out the mess when retailers go wrong. Their telephones are still ringing off the hook. In fact, enquiries about the services of restructuring specialists have been increasing over the past couple of months. It is true that no one is talking about a return to the carnage of December and January, when there was a sale on the shares of virtually retailer on the stock market, and it seemed that a famous-name chain was going to the wall every other week.
However, there is still pain to come. The brutal truth is that too many retailers have too many underperforming shops in too many bad locations. Unemployment is rising rapidly and confidence remains desperately shaky.
The sunny weather might be persuading people to splash out a bit, if only to provide some relief from the all-pervasive ecnomic gloom, but they are being cautious. Add to that the effect of the weak pound on imports, and impending VAT rises in January, and it looks the like the new year will be anything but happy on the high street.
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