Monday, 12 May 2008
Retail Sales are slipping confirmed a survey by the Confederation of British Industry’s (CBI) Distributive Trades Survey.
Lots of talk about poor April weather and an early damp Easter are factors being blamed.
In retail, holidays and weather are major major factors to shifting goods. April 2007 was a surprise heatwave which boosted sales. But the current trend is still down with any product related to the housing market seemingly worst affected. Some stores are ordering less from their suppliers because they believe that the longer term might be very tight. The long term news for economic growth.. not that good.
But I would expect to see for Summer 2008 a revival and decent growth beginning in June across most retail sectors, that Mr Brown and the Mr Darling will use to suggest interest rate policy is working as predicted. It is controlling inflation but not hindering economic growth. They may be right, but that won't be why.
The real reason will be the awful rain and terrible flooding of Northern Ireland and much of the Midlands and South West last June. May-June 2007 was the wettest since records began. Average rainfall across England was 140mm , more than double the June average. July was little better and bought yet more flooding. Year on Year figures will almost inevitably rise.
Retailers still sitting on all that unsold patio furniture, paddling pools, and sunglasses from last year will have bought in less this year but will be very keen to make hay while the sun shines. Expect heavy discounts if consumers look like not spending due to tight budgets, or to clear old stock if this current great weather begins to look like fading away over a long period.
Supermarkets all missed out on the BBQ and Beer and Ice-cream sales etc of last year are itching to make it up this year. Plus the low value of the pound to Euros and the lack of a holiday loan or a credit card to put it on will keep many of last years escapers at home.
Messrs Brown and Darling can claim the usual credit for an increase in consumer spending while the heat is on AND/OR to a fall in consumer prices, and so to a fall in inflation, if the rain comes back. The very best of both worlds.
Even better they haven't got to actually do anything.. except enjoy the sunshine with the rest of us.
Posted by Bill Quango MP