Discounts fail to lift July sales

neverdespairgirl

Price-conscious consumers continued to hold back on spending last month, the British Retail Consortium said, with "frivolous shopping off the agenda".
With consumer confidence at new lows, even heavy discounts had sometimes failed to lure people to open their wallets and purses, the BRC added.
Like-for-like retail sales fell 0.9% compared with July 2007. Total sales, which include new stores, rose 1.7%.
Sales of food and drink were up, but against weak sales a year earlier.
The results mean that there has been negative like-for-like sales growth for four of the past five months.
Between May and July, like-for-like sales were 0.3% lower than the same three-month period a year earlier.


http://news.bbc.co.uk/1/hi/business/7554225.stm

dudleyboy

"Declining consumer confidence and rising household bills have hit spending on furniture and other household items particularly hard, the BRC said."

What I particularly like is that no one ever really reports the fact that the entire consumer boom was fueled by cheap and (too) easily available credit. True, confidence is low and household bills have risen but it's the complete withdrawal of people's spending power that's causing this.

But the discounts and sales promotions will continue. I'm really looking forward to a bargain-rific Christmas this year! Just watch them slash those prices to boost sales!

tomstickland

I'm liking the need for ever more discounts. I've been saving for years.

Generali

This is a demonstration of why the BoE doesn't need to raise interest rates. Deflation in action!

mewbie_2

Deflation to Denation, Denial to De.. er. bother.

Generali

mewbie wrote: »

Deflation to Denation, Denial to De.. er. bother.

Is that the old Fry's Chocolate advert?

mewbie_2

Quite possibly, although mastication to the nation was stuck in my mind, can't remember what the product was though.

Generali

mewbie wrote: »

Quite possibly, although mastication to the nation was stuck in my mind, can't remember what the product was though.

I think that was an <<ahem>> specialist publication that brought out a line of chewing gum as a spin off.

Not that I know you understand. I found a copy on the train in a discarded Evening Standard. Really.

mewbie_2

I'm going to cover myself with a link...
http://www.youtube.com/watch?v=x33DHcTUhoU

Now everything I type is sounding like a double entendre.

WTF?_2

Generali wrote: »

This is a demonstration of why the BoE doesn't need to raise interest rates. Deflation in action!

Deflation in discretionary spending - but strong inflation in the cost of living essentials.

This shows the stupidity of keeping interest rates down in the hope of somehow helping the consumer economy. More cash spent on food, keeping warm and transport means less cash to spend on recreational shopping.

Generali

!!!!!!? wrote: »

Deflation in discretionary spending - but strong inflation in the cost of living essentials.

This shows the stupidity of keeping interest rates down in the hope of somehow helping the consumer economy. More cash spent on food, keeping warm and transport means less cash to spend on recreational shopping.

What you say is true for July's CPI/RPI figures (food up 12% yoy, petrol up 10%, diesel up more like 15%, gas + electricity up double digits too).

But........

the average price for diesel they measured was £132.3p/litre. When I took the family to the coast on Sunday the price was £1.25 or £1.26 everywhere I saw except in one really rural garage.

record harvests in the US mean food prices are dropping quickly (corn down 1/3rd, soya down over 1/4, wheat down by more than 10%). As makers of bread etc buy their stocks in advance expect to wait until late autumn or even Christmas before prices start to come down but I reckon by December at the latest the news will be full of supermarket price wars.

Wholesale gas prices are down by over 30% since the start of July.

I reckon we've got 3 months of rising inflation max. In a year the newspapers will be writing about the risks of deflation and people will be whinging about how the BoE kept rates too high for too long which means that they once again will have missed the point.