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Last year, Britain's bargain basement retailer increased sales by 20%.

Alas earlier in the week, its owner Associated British Foods, announced that they had seen a "noticeable slowing down in demand so far this year"

Now you might argue that this is only to be expected after Xmas, but the share price went down 6% on the news, the worst performer of the day in the FTSE 100.

John Lewis also reported a drop in sales. So if people are jibbing at the price of a ?2 teeshirt and a ?6 pair of jeans, I can see trouble ahead in the consumer spending sector which accounts for two thirds of the economy.

Its gonna be grim out there.

Cheers
D

Hardly surprising sales of anything non essential are down.

Many whose pay review was January will have had an increase less than real rate of increase in the cost of living and maybe no increase at all while those whose review is April are still waiting to find out. Last year they may also have had a low or no wage rise.

For others the primary concern will be redundancy.

Some will still be paying off loans for Christmas while the effect of the VAT rise and costs from increased fuel are still filtering through plus more fuel cost rises on the way. The winter was cold so increased fuel use and Council Tax bills for this year are still to be advised.

Hence inevitable sales very quiet now and may well be for some time.

Last week TJ Hughes were running 20% off virtually everything yet shop still relatively quiet.

I agree. I think everybody in the public sector will have either been given notice that their job is under threat or alternatively if they haven't, they will still be worried about the next rounds of public sector cuts in subsequent years.

Those people with a mortgage who bought in the last 5 or 6 years in the North could be potentially sitting on negative equity so if they are working, my guess is they will be putting all their spare dosh into paying down the mortgage.

I really, really hope not, but I am getting a sense that we might be going down the Ireland route i.e. government brings in huge cuts and the IMF, OEC laud the Irish government to the heavens for their swift action just as the IMF approved of Osborne's plans. The Irish economy tanks as a result of the swingeing cutbacks and they end up needing an enormous bailout from the IMF who demand even more swingeing cuts.

Obvioiusly every country is different but it is difficult to see how Britain can pull itself back up whilst consumer confidence is on the floor as it is now.

CHeers
D

Excellent news, especially for the poor kids working in their sweatshop factories in Asia. Maybe people are realising their clothes are shite quality and worse value than more expensive stuff that lasts and is more eco friendly. Never worn it and never will.

Agreed Arginald about the sweatshops. I am no supporter of Primark.

They are just one of a number of companies that drive down the cost of their clothes from Asian suppliers to the absolute minimum and then feign horror when one of their suppliers is found to be employing kids to do the work for them.

But it is still a reflection I suspect of the economy going downhill rather than people wanting to get higher quality/more expensive clothes.

CHeers
D

Step one is to get the unemployed back to work, making the UK more self-sufficient and cutting imports. How much of the tax we pay is used to pay unemployment and related benefits?

Neither the last government nor so far this one are actively working to ensure the security of existing jobs and create new real long-term jobs.

Sadly we have lost volume electronic and computer manufacture to Asia for ever. But why can we not produce pork and chicken as cheaply as Holland and Germany without the cost of transport?

Before the last election it was reported that 30 years ago 90% of the components JCB buy were UK sourced but now just 36%. The current and previous government should be ashamed.

Alstom and the French are government are protesting because new Eurostar trains on order are from Siemens. Here the government led new intercity train project has Hitachi as front runner and many new trains have been supplied by Siemens in the last few years rather than UK built. Chinese built trains could be running here before too long also.
New signalling has been supplied by an Italian company with some delays and problems due to language misunderstandings.
German State Rail DB now own Arriva and have a major interest in several UK rail franchises as do other European operators.

I'll stand corrected but I think the largest UK volume produced commercials are Transits at Eastleigh. Most vans running are imports VW, Mercedes, Peugeot, Nissan ........ and larger trucks are Volvo, Scania, Mercedes, Iveco.....
Most buses are UK built bodies but primarily foreign chassis Volvo, Scania etc.

Within 15 miles of me I guess at least 10,000 car manufacturing jobs have gone in the last 15 years. One big site is cleared and now mainly housing being built.

A smaller site that was component manufacturing has advanced plans for a hotel, a supermarket, a few small business units and some housing. Hence mainly minimum wage jobs that do not replace like-for like the skilled and semi-skilled manufacturing jobs.
This is a bad place for yet another supermarket as one massive major chain one in the neighbouring retail park and two no-fills ones nearly. The area is gridlock all day every Saturday and parts of Sunday. The place for a new large supermarket would be 2 - 3 miles away where there is none. Yes the local small shops in the area would suffer but ultimately few use these as their primary shops and it would help congestion and pollution.

Until there is a real practical government led change there will be no significant recovery.

"Until there is a real practical government led change there will be no significant recovery"

There's a big difference between management and leadership. Government are merely managers; there is no evident leadership, no vision. They'll tell you otherwise but anyone can have ideas, it's implementing them which is the hard part and where they fail to deliver.

"Step one is to get the unemployed back to work, making the UK more self-sufficient and cutting imports. How much of the tax we pay is used to pay unemployment and related benefits?"

"Before the last election it was reported that 30 years ago 90% of the components JCB buy were UK sourced but now just 36%. The current and previous government should be ashamed.

I think these two points are interlinked. Britain is now primarily a low wage economy it seems to me.. Being unemployed is largely about living on a pittance. Jobseekers Allowance ?65 a week. ?3250 a year.
Rent paid e.g. ?400 a month ?4800 a year
Council tax a year ?800 a year

Now if you are one of the millions in Britain doing a job on just above the minimum wage getting about ?6.50 hr. by the time you have taken travel, tax, national insurance etc etc out of your ?12,500 a year you wouldnt really be much better off probably than the pittance you get on the dole.

I read somewhere that of the 200,000 jobs created last year 190,000 of them are part-time. Usually because the employer is hoping to cut out having to pay National Insurance and limiting some of the employee rights of their people.

If you go back 30 or 40 years there were many hundreds of thousands of well paid jobs for the "working man" e.g. coal mines, shipbuilding, steel making, car manufacturing etc etc. Jobs that would produce an income that was a hell of a lot better than being on the dole.

In London, now for example, the majority of people in receipt of housing benefit are actually working! They just are not earning enough to survive without that help. So in effect a lot of benefits are basically subsidising the landlord/employer rather than the employee trying to earn a living.

Perhaps, Britain needs to take a leaf out of Germany's approach where they have managed to keep a lot of their manufacturing output. They have still managed to be competitive in world markets whereas our manufacturing has slumped under both Tory and Labour governments.

Until a government has the flair and imagination to help create an environment in which "real" long term jobs can be created, it is difficult to see how we can escape this low wage dead-end which is what so many millions find themselves in.

Cheers
D

"Until there is a real practical government led change there will be no significant recovery"

There's a big difference between management and leadership. Government are merely managers; there is no evident leadership, no vision. They'll tell you otherwise but anyone can have ideas, it's implementing them which is the hard part and where they fail to deliver.


I totally agree any idea is worthless unless implemented.

After the election the con-lib coalition stated -
We expect the private sector to create xxx jobs ( I can't remember the number recall over a million )

Given many business are struggling and feel they are operating despite the government rather than being helped and encouraged by them I doubt anything like this number of real new jobs will be created in the next 4 years.

Some very valid points David.

First you are right there is no financial incentive for many to work 40+ hours on basic wage rather than live on benefits.

Second all those on basic wage and also receiving benefits are adding to the burden on government tax receipts while the landlord and employer are the beneficiaries.

Third indeed we are becoming a low wage economy, that was my point in my first post referring to the site of a closed factory that had a mix of semi-skilled, skilled and management jobs planned to be rebuilt with a supermarket, a hotel and token gesture of a few business units.