Raw capitalism on the High Street

Share
Related Topics

Economists and financial advisers have been warning British consumers for years that they need to cut back on their spending. We have been told many times that we have accumulated dangerous levels of personal debt, that we need to tighten our belts if we are to avoid catastrophe. But now we have finally acted on this advice, many economists still seem to be forecasting doom.

Economists and financial advisers have been warning British consumers for years that they need to cut back on their spending. We have been told many times that we have accumulated dangerous levels of personal debt, that we need to tighten our belts if we are to avoid catastrophe. But now we have finally acted on this advice, many economists still seem to be forecasting doom.

Part of the dilemma lies in the fact that high street shops rely heavily on the huge sales traditionally made over the Christmas holiday period. Figures released yesterday by the Office for National Statistics (ONS) show that UK retail sales dropped by 1 per cent in December. The British Retail Consortium believes Christmas 2004 was the worst for 10 years. By other measures it was the worst since 1981. And this does have economic implications. In response to these figures, the annual 2004 rate of growth had to be revised down by the ONS. If our economy continues to slow, we will all inevitably feel poorer.

But this is not the whole story. Some stores indeed had a miserable Christmas. Morrisons, Woolworths, House of Fraser and Marks & Spencer posted disappointing sales. But others did surprisingly well. Tesco, Monsoon, Jessops, The Body Shop and HMV all did better than at the same time the previous year. In the past, when retail sales slumped at Christmas, they slumped more evenly across the sector. But this time well-run stores have been rewarded and badly-run outfits have suffered. This is efficient capitalism.

We should bear in mind that households today use only about 40 per cent of their budgets on the traditional high street. The public has more ways to spend than in previous years, when the Christmas retail figures would have been much more significant. An unprecedented number of Christmas gifts were ordered over the internet last year. There is also the world economy to consider. All the projections for 2005 indicate a global slowdown in growth. This will inevitably affect Britain. In this context it is desirable that British consumers tighten their belts slightly - so long as panic does not set in and cause spending to dry up completely.

These figures are by no means catastrophic. British consumers must continue to spend, but not on the scale they have become accustomed to in recent years. And in this context, as these figures demonstrate, it is still possible for the best of Britain's high street businesses to thrive.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Community / Stakeholder Manager - Solar PV

£50000 - £60000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Senior Marketing Executive (B2B/B2C) - London

£32000 - £35000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

C# .Net Developer

£23000 - £35000 Per Annum: Clearwater People Solutions Ltd: C# .Net Develop re...

Electronics Design Engineer

£35000 - £45000 per annum + Benefits: Progressive Recruitment: My client are l...

Day In a Page

Read Next
 

The daily catch-up: Joe on Vlad, banks of the Jordan and Blair's radicalism

John Rentoul
 

Believe me, I said, there’s nothing rural about this urban borough’s attempt at a country fair

John Walsh
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor