Leigh Sparks: Breath of spring air needed to blow away consumer caution

CLEARLY, the retail data out for February is not great. There is continued pressure on consumer spending and it is difficult to know how likely an improvement is, given the general mood out there.

I think there is a feeling that consumers need to get confidence back as much as anything else.

I think January’s Office for National Statistics figures surprised people that they were positive and the downgrade brings them more back into line. Most other analysis, such as the British Retail Consortium, were saying things were pretty bad, and here was a figure that was surprisingly high – they have now revised it down – this just demonstrates the volatility in the market.

The February figures from the BRC were not great and the picture in Scotland was even worse. This gives a feeling that consumers are very cautious and stores are still offering a lot of discounts and price promotions, as they need to get people to spend. Given that VAT is now out of the inflation figures comparison, we may find that, in some parts of the country, things may start to change in terms of sentiment.

However, the feeling about the poor figures is that we could have had a plateau in the past couple of months, where things have stabilised. But how long it will stay at that plateau is debatable.

It is possible that people could feel a sense of celebration in the coming months – spring is on its way, and we have the Diamond Jubilee and the Olympics coming up as well.

However, the downside is there could still be more bad news to come in the economy, especially in regions outside of London and the Southeast.

• Professor Leigh Sparks is head of retail studies at the University of Stirling.