Jon Copestake is one such individual, and I frequently find myself in agreement with the majority of his comments in Retail Week Magazine. His comments today – Despite optimism, a UK retail recovery remains fragile – are no exception.
Along with many others, he’s quoted the LDC and Springboard figures that show a very tiny improvement in high street vacancy rates as part of the general consensus of optimism that seems to be building. There were equally modest positive increments in retail sales figures which, whilst being better than expected, are still in the order of 1%.
Last week we saw breathless reports that the nebulous and somewhat metaphysical indicator known as ‘consumer confidence’ had finally recovered from the negative position it had been in for 10 years. We were presumably expected to rejoice that this number had now reached a big fat zero, all of us clapping with one hand whilst frantically grasping handfuls of straws with the other.
Having spent a small portion of my academic career designing questionnaires, I’ve never been convinced by such a slippery concept. Quite what real use a number based on asking a select sample of people if they’re likely to spend a few quid in the coming weeks is supposed to be eludes me. I think it’s more something that retailers and investors cling on to as a comforter, intended to give the impression that we know the unknowable – the inside of a consumer’s head.
It’s hard to ignore the conclusion that the effort we all put it to predicting doom and gloom around the time of the collapse ultimately led to a self fulfilling conclusion. But now we seem equally eager to ‘big up’ minuscule vacancy level movements in the order of 0.5% or a 0.4% – which in statistical significance terms are pretty much static – as evidence that good times are just around the corner.
The overall assessment from many retail analysts is that we’ll never see a return to the heady days of the early noughties. ONS figures suggest that even though wage growth has edged ahead of inflation, most households are still around 10 years behind in real terms spending power.
Even if wages do rise in real terms there are just too many other ways for people to spend money now, assuming the average person ever really gets back to a point where they’ll feel they have the cash to splash around. Factor in an ever imminent increase in mortgage rates, along with another housing price boom and the whole scenario starts to take on the familiar twists of the path that led us to disaster last time.
There are so many artificial factors driving the so-called recovery I think it’s far too early to be planning the next major roll-outs. Low interest rates, the property bubble being inflated by government help to buy schemes, changes in weather patterns, even mis-sold PPI payouts are all shifting winds blowing across the sands of the retail landscape. And we all know where building on sand gets us.
Whatever the numbers are based on there seems to be a mounting roar of expectation that the bunting will be out for a great big retail street party any day now. Something of a turnaround from the interminable reports of the exact opposite a couple of years ago. Personally I’m far from convinced that what we’re feeling are the positive winds of change and more worried that the rush of air could just be the prelude to another almighty slap right in our over-eager little faces.