retail goes negative

Joe_Bloggs

Loughton Monkey said:-

A nice thought, but there is no such thing as a consumer spending-led recovery. The extent to which we spend more on imported goods just makes China [et al] richer. The extent to which we spend more on British goods simply swishes wealth around, but doesn't create it.

There is merit in having a domestic market swishing money around. Entrepreneurs can perfect their ideas prior to exporting their manufacture to the far east.

J_B.

dtsazza

People are too fixated on figures that used to go up, without considering the actual implications of them.

For example, this BBC article suggests that the reason why British children are the unhappiest in the Western world is because of the materialistic culture. The implied conclusion is that it would be great if we bought our kids less stuff, and spent more time with them instead. I imagine that very few people would argue that's undesirable.

And if that happened, what would one of the consequences be? Why, lo and behold, retail growth would be negative as people stop buying as much tat.


You can't have it both ways. We can't move away from a materialistic culture without negatively impacting the retail market. We can't stop living beyond our means without decreasing GDP (compared to a point in time where we did). We can't have bad companies failing, as they're meant to, without an (at least temporary) blip in unemployment.

I'm not apologising for all negative figures, but often they're necessary signs of a more fundamental improvement elsewhere, which is almost always overlooked.

Pennywise

Surely the penny is dropping that perpetual growth isn't possible.

If an economy relies on growth, whether it be consumption, rising birth rates, prices, or whatever, that means it's nothing but a ponzi/pyramid scheme.

Such schemes always crash eventually for one reason or another.

Perhaps it's time there was a change of emphasis away from growth for growth's sake and towards thinking about how to achieve a sustainable steady economy - that means putting all the historic economic theories to one side and thinking the unthinkable, thinking outside the box, etc.

All we've had recently is artificial growth created by funny money, i.e. betting on commodities, exchange rates, currency, etc., that has fed back through the economy, but wasn't real. Same with creating public sector non jobs just for the sake of reducing unemployment or other political reasons - i.e. people not actually contributing by making or doing something that yields results. Should we not be trying to achieve growth by actually making and doing "real" things. At the moment we, as a country, are merely passengers trying to ride the backs of other countries who are making and doing things (i.e. the service industry).

IronWolf

How dumb do you have to be to disregard the riots as having a major impact on this. They lasted about a week, thats a quarter of the month, of course they are going to have an impact on numbers.

It's not surprise really that retail is hurting. The retail sector is always the hardest hit in hard times. They have the lowest profit margins of pretty much any sector, huge operating costs and fierce competition, especially since the likes of Amazon popped up.

Rochdale_Pioneers

Was at an IGD Grocery conference last week. Their chief economist showed stark graphs showing consumer demand falling as fast as it did in 2008. The only reason value sales increase as volume sales decrease is because of price inflation.

He also predicted a recession in retail through to 14-15......

dtsazza

Pennywise wrote: »

Surely the penny is dropping that perpetual growth isn't possible.

If an economy relies on growth, whether it be consumption, rising birth rates, prices, or whatever, that means it's nothing but a ponzi/pyramid scheme.

Such schemes always crash eventually for one reason or another.

Well, I see your point.

But if growth solely depends on perpetually increasing population, and perpetually improving technology, then I think those two are sustainable. And in that regard I think that real GDP will continue to trend upwards forever.


It's only a Ponzi scheme if the appearance of improvement in the short term is based around taking on longer-term liabilities. Case in point - a lot of the gains of the mid-2000s, which turned out to be people racking up greater debts (leading to increased GDP then at the cost of lower GDP later when they decided to pay down their debt). I don't think population growth or technological advances fall under this category though; if technology becomes static for a while, we don't lose any of the productivity advances we've already discovered, and there's nothing to "pay back" in future.