Tescos, Morrisons and M&S all delivered poor retail sales results this morning. Sainsbury was not much better yesterday. The message is clear; on the High Street people are not just having a cost of living crisis, they're seriosuly cutting back.
Now, as someone who is often bemused by what people think it necessary to consume I could celebrate this, but I am not because in this there is, I suspect, a cause for real concern.
It will undoubtedly be true that some of what has been cut back is just frippery. I have no concern about that, but it is reported that last summer Morrisons thought that one third of their customers were a pay cheque away from bankruptcy. UK savings data would suggest that was an optimistic estimate on their part. Most households have no financial savings of any consequence in this country. For them there is no cash buffer of savings when things go wrong.
And things are going wrong. Energy costs are indicative of high underlying inflation. And now there is a fear of rent rises, mortgage increases and many other fundamental costs to all households rising way ahead of inflation - some, no doubt, as a result of official policy decisions that are likely this year. And that is before the fear of unemployment - deliberately engendered for many by this government - is factored in.
So these are not just stories of retailers losing a percent or two in their sales growth. These are stories of quiet desperation as families wonder how they can and will survive.
For many they have no answer to that question for one good reason, which is that there is no obvious answer to that question, especially when the safety net of social security is also being pulled away from so many, so fast.
This retail sales data is not just a matter of concern for financial markets. It should be see as a wake up call for all concerned about the lives of people in this country; lives that are becoming increasingly financially unsustainable.
Worry, please. Worry a lot. And demand action.
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Hello Richard,
as you say there are worrying times ahead all driven by the scum of government of what ever flavour. What really annoys me is the fact that the whole financial system globally is a giant ponzi scheme. All 4 big banks in the UK are bankrupt held up by QE, plus the fact they have been allowed to operate above the law. If the big 4 accounting firms did their job properly instead of cooking the books, a very different picture would emerge. Isn’t there a saying I’ve heard somewhere, ” where all in this together” Not one CEO is doing jail time, why not? because the government is in bed with these gangsters. Who is suffering? yes, the ordinary people in the street of all levels. Small businesses can’t get loans, in fact RBS has been caught deliberately winding up businesses and making profit by doing so.(the case of the hotel owners in the news comes to mind). And what happens, they get a slap on the wrist and a small fine and carry on as normal. Am I angry, you bet I am. I, like you Richard was brought up with a moral compass and have tried all my life to be fair and true in all of lifes dealings. Sorry to rant on so, I just hope people rise up and take action before it is too late.
Indeed- but I’m afraid the populace has been dumbed down and zombified and misinformed for so long that it is incapable of concerted action -the prerequisites of fascism!
The news comes as no surprise as people using foodbanks, as an increasing number are forced to do, won’t be using supermarkets. Odd no-one’s made this connection before really. I mean, what do these companies expect? Are they incapable of reading about tsunamis of benefit sanctions, swathes of entirely unconscionable benefits delays AND use benefits claimants themselves as cheap labour without any of them stopping to think, ‘Hang on a minute, these are our customers! If they’ve all got no money and can’t shop with us, what’s going to happen to our profits?’ Will it occur to any of them even now to suggest to Duncan-Smith that he turn it down a bit? I bet not!
maybe if the pockets of these corporate gangsters continue to be affected they themselves will be obliged to pay people decent and reliable benefits-these people will sing to any tune if it makes them money!
This is ‘good’ news in a way because it means the ‘truth’ about the economy which is largely masked by dubious measurements and manipulation is leaching out. So far ‘the quiet desperation’ has been barely a background murmur, this murmur needs to crescendo. We really should be suffering deflation and in reality probably are it has just been covered up. people will need to wake up to the true nature of the housing bubble led swindle that is impoverishing the majority -yet still the Tories brazenly carry one thumping the poor and ill and rechanneling the anger of those struggling to pay for housing and energy on those a rung or two lower. The polls at Tory HQ must still indicate they can get away with this level of mendacity. We need to worry!
Hmm I am not so sure this is a surprise.
I use to use an Aldi back in the day, over 10 years ago. Nice shop, liked the wine gums. However it was as they say, cheap as chips. It wasn’t doing so well back then.
Now its seems to be posher than Selfridges. Its compared against the main stream in news reports. Its now a bit expensive and the customers are flocking in.
Market share is going from Morrisons, Tesco the ghastly place and Asda, to these stores. This is about the people using a poor persons shop, just a reincarnation of the said shops into mainstream.
I see that the decrease in sales at Tesco, Morrisons and M&S is a is a sure sign that the economy is going down the pan. Meanwhile no doubt the increase in sales reported by Waitrose, Next, Aldi, the Co-Op and the expansion plans of Lidl are also sure signs the economy is going down the pan. Elsewhere on your blog you worried that the increase in car sales would inevitably lead to the economy going down the pan.
This morning I saw a four legged dog. I’m sure the only interpretation for that is that the economy is going down the pan.
Meanwhile, Rich (above), Tesco a ‘ghastly place’ and Aldi a ‘poor persons store’? I’m sure if you stay out of both shops you won’t have to bump into any poor people.
Maybe you need to consider scale
Chris – you lose your humanity when you become a facetious so and so!
The economy is already down the pan if you try to expand the dreadfully small perceptual box you are inhabiting.
I believe many people don’t have the spare cash to do a lot of the activities taken for granted over many years.
The mixture of rising energy, house, insurance and fuel prices together with the threat of interest rates rising when many people are struggling to keep up mortgage repayments is bound to cause further hardship and damage our economy in general. Then there’s rent increases…
I would be interested in knowing how much purchases to be donated to foodbanks contributed to the figures!
As for tesco, I was shopping there earlier and listened to a couple looking at the wallets for tablet computers…. ¨we can buy these a lot cheaper off ebay¨
Morrisons has not embraced the online version of shopping as fast as tesco…..and more people are buying online…convenience and lower fuel cost….over £50 free of delivery charge…
Unless it hasn´t been noticed, the delivery vans have increased dramatically this year (mostly driven by part-timers)
Tescos, Morrisons and M&S all delivered poor retail sales results this morning. Sainsbury was not much better yesterday. The message is clear; on the High Street people are not just having a cost of living crisis, they’re seriuosly cutting back
At the same time Lidl and Aldi are growing, and fast. Does that mean that Tesco, Sainsbury’s et al have simply got the wrong business model for modern times?
I don’t think their business models are wrong, its just Aldi and Lidl have changed theirs to be more main stream.
You mention mortgage rates( interest rates) but is it not inevitable that 5 years or so after the 2008 financial crash they inevitably will go up especially as QE comes off. Low interest rates will rise too now the economic recovery gains pace; both the UK and US politicians have used very low interest interest rates mainly as part of the stimulus package to reduce the impact of the financial crisis. Of course it is incumbent upon on all parties both as lenders & borrowers to exercise due diligence when we make/borrow mortgages as interest rates rise soon. Inevitably whom ever we are we will have to factor this fact into our future expenditure – the governments surely will be unable to keep them permanently low.
All we’ve got is banks ‘looking’ solvent that aren’t!
Quite.
But they´ve lent people loads of non-existing money to buy houses, which they´ĺl then take back if the payments cannot be kept going. Then they´ĺl sell them at auction, get money (that they never lent anyway) and do it again.
Interest rates are low (0.5%)….but mortage rates are….not that low…..hmmm.
And if they mess-up again, the gov will print loads of lovely money to prop them up until they can get back on track…of robbing us blind again.
“Of course it is incumbent upon on all parties both as lenders & borrowers to exercise due diligence when we make/borrow mortgages as interest rates rise soon. Inevitably whom ever we are we will have to factor this fact into our future expenditure — the governments surely will be unable to keep them permanently low.”
Yup…and watch what happens to that housing bubble engineered by the tories and underwritten by tens of billions of pounds of taxpayers money when they do!
And watch what happens to this so-called “recovery” too!
Steveo!!
they, quite literally, couldn’t care less, could they ?
The deeper the Schmucks want to plough themselves in the better.
The odd thing is that if you read the Daily Express (the ultimate Schmuck’s newsletter) they are still convinced everything is going fine. I expect Chris (above) is celebrating with the rest.
UK like-for-like YoY retail sales was *UP* 0.4% in data released this morning.
Whilst it wasn’t as high as the economists estimates of up 0.8%, it doesn’t show a decline in retail sales. A few retailers showed poor results doesn’t mean all retailers are doing as badly.
That’s a real decrease in terms of head of population and inflation
No – retail sales are normalised for inflation and independent of population size given that it is an indexed rate of change.
Retail sales grew, just not as fast as economists were predicting.
If wages keep declining against inflation, retail sales keep growing against inflation, one must assume household debt is also growing.
I’m not being funny when I say this can’t end well.