One of the key sets of figures that turn up in the main media is that of retail sales, however defined. This is because one of the economic drivers is how much people spend, where and on what.
Figures that are going up are regarded as good because it means more activity. Those that are going down are bad because this indicates decreasing money flows.
Whether or not the consumption is useful, necessary or wasteful or ornamental is not a consideration. Fashion is said to be a driver but where the need to buy essentials turns into purely changing for the sake of change as in the latest designs and models etc. is not clear or marked. Often the media presents any fashion change as by definition a necessity.
But retailing itself has not remained the same by any means. In my time there have been three radical shifts. After 1939 for a number of years there was a severe reduction in retailing because the money and effort were needed for other things.
It was not until the 1950’s that this began to unwind to the extent that there was much greater freedom in what people did with their money and the marketing men were keen to persuade them to spend it. But then there was little credit for pure consumption reasons and restricted disposable income because of the cost of basics.
In the UK one factor in what retailers existed and to what purpose was Retail Price Maintenance which meant that very many things would cost exactly the same whether you bought it in the small shop round the corner, or at a nearby shopping centre or went “up town” to the department stores and posher shops.
This kept huge numbers of small retailers in business in both town and country. Also it enabled a wide range of smaller specialist shops to exist alongside the chains and major stores.
When this was abolished by Edward Heath, President of the Board of Trade in the Douglas-Home administration of 1963-1964 this unleashed real price competition in which the larger retail groups and major stores were at an advantage.
This along with the growth of supermarkets and car ownership etc., allowing greater consumer mobility over the next couple of decades saw the progressive and extensive decline of the small local retailer sector.
Retailing by the 1980’s was a different world to that of the 1950’s in many ways. By then the concentration of shopping into bigger entities and the new shopping malls was on the way to provide the bulk of retailing in this period.
Now we are in the throes of another major change in retailing provision. It is occurring rapidly as the internet and other communication systems have developed. Quite how much the figures of today make sense in terms of those of the past is a matter for real doubt.
Also how far changes in the nature of employment, patterns of earning, attitude to spending and critically saving may stay the same or change is entirely unpredictable. At the moment theoretically it is not rational to save given current rates of interest and the unreliability of the financial services.
But there are other ways of saving and some odd things seem to be happening. Why in this time of serious money problems do the prices of art works and antiques seem to be rocketing in so many sectors?
Also, patterns of spending will change as age profiles alter. If migration either internal or external affects people in their attitude to what and how they consume different then this will change. Also, could the public suddenly tire of “fashion”?
There are then perceptions of risk among those with disposable money and how they see their short term and long term futures. There is a lot that could happen here and the way the world is going old assumptions could turn out to be hopelessly wrong.
If at the same time as there is another revolution in how and where we shop suing the net or other types of retailers along with changing patterns of distribution systems then our present fixation with the month by month sales figures may turn out to be a false trail.
We would all help ourselves by rediscovering what is really meant by “consumption” and “investment”.
As for personal investment I wonder what’s running at
next Tuesday? Kempton Park