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March 03, 2011

Comments

Jim

I would hazard a guess that a good proportion of retail woes are causes by structural changes (internet retailing mainly) rather than lack of spending power.

I personally hardly ever buy stuff in shops any more - most of my purchases arrive in the post, freeing my time to do other things, and are often cheaper also. I doubt I'm the only one doing this. Retailers had better get used to it.

PeteOnTheA419

Interestingl, Paul Krugman blogs on confidence in the NYT today http://s.coop/mhc - using the UK as a cautionary example. It seems to me that confidence is falling not so much because of the cuts, but in anticipation of them (after all they don't really start kicking in until next month). The way Cameron and other senior ministers have been talking up cuts since they came to power has inevitably dented confidence seriously and had direct negative results on small businesses especially - but economic decision makers inn general.

Pete

ortega

Here in Spain, while the GDP was going down and the jobless figure was rocketing, the heroic working class succeeded in keeping the wages growing. Have a look at the number of people out of work today (still growing, tomorrow they will be more) and ask yourself how many of them would prefer to have a job with a lower wage.
One of the ways the workers advance their interest seems to be keeping others out of job.

Neil

"I would hazard a guess that a good proportion of retail woes are causes by structural changes (internet retailing mainly) rather than lack of spending power."

Yeah, but - the economy isn't a zero sum game - except, er, when it is...

Glenn

Its laughable as the thing that will kill the retail trade is low demand... as chris sez, the govt would need some kind of fiscal stimulus rather than austerty.

A lot of the businesses signed up to their letter to the Telegraph backing the cuts in Summer were major retailers.

In my broken job as an economist in a regional development agency, govt support for retail was extremely rare - its a classic sector with high rates of 'displacement' - i.e. it is a super-competitive sector, and any govt funding would fund one retailer to take business from another. It was never a runner for assistance.

When I see multiple stores in city centres across the land, its obvious that major stores (and I'm not talking about supermarkets here) have massively overstretched their floorspace, and have had a strategy for maximum high street exposure and positioning.

They have gone for the easy strategies, rather than focusing on their products, service, and differentiation of retail offer, or of being able to better exploit the changes in demand post-recession.

Retail employs a helluva lot of people - especially folks with low qualifications. Its importance is probably as a mass employer more than anything else.

The sensible thing a govt could do it stimulate demand.... but it aint gonna do that.

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