Terry Murden: Traditional shops may struggle but it is not all bad news for retailers

ARE we really falling out of love with shopping? It’s a British pastime, surely. The truth behind all those gloomy retail statistics may be more complicated than a downturn caused by a squeeze in household budgets.

The high street is definitely suffering. Sir Philip Green is not planning to close 260 Top Shop, Dorothy Perkins and other outlets in his Arcadia empire just for fun. The lengthening list of troubled retailers includes Comet, Mothercare, HMV and anybody trying to sell books and furniture.

But the reasons for each one’s problems may differ. We’ve changed the way we shop in more ways than one which must be colouring the statistics for high street sales and footfall.

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The unstoppable march of the supermarkets is blamed for some losing their unique selling proposition, providing a one-stop shop to replace all those individual outlets. In some cases these smaller shops are now in the wrong location. Mothercare, for instance.

Or they have been caught out by the change in technology: HMV trying to sell CDs to an iPhone generation, and Borders attempting to compete with e-books.

It’s the online onslaught that is presenting the biggest challenge and next Monday will prove just how much of a rival the click-and-buy shopping culture is throwing down the gauntlet to the bricks-and-mortar high street. It may also offer clues as to how much consumers are prepared to maintain their spending despite the squeeze.

Monday is set to be the busiest ever online shopping day as thousands go online to ensure their Christmas purchases arrive in time for the big day. It’s been dubbed Mega Monday and Visa Europe alone is expecting a record £303 million, or £210,000 a minute, to be spent on Visa cards, a 12 per cent rise on last year.

This is evidence that the shopper is not so much in hiding as finding other ways of spending his or her money.

It is backed up by a survey released yesterday looking into Christmas shopping trends that reveals 63 per cent of consumers across the UK intend to spend more or the same this year than previously despite the ongoing challenging economic conditions.

The worry is that they revert to bad old ways and stick their purchases on the never-never credit card.

The contradictory evidence emerges in data that shows consumers definitely have less money at their disposal. October saw a £13 (7.1 per cent) a week fall in disposable incomes against this time last year. This was a slight improvement against last month’s downwardly revised £16 (8.8 per cent) a week fall. Nevertheless, consumers remain under pressure going into Christmas and with people having less money in their pockets, sales growth over Christmas will be hard to come by, according to analysts at Evolution Securities.

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The formerly all-conquering electrical retailers are having a wretched time with Comet being sold for £2 and Dixons yesterday announcing it had cut its UK and Ireland losses. Nonetheless it was still making a loss – which was wider at group level.

Does all this have implications for future retail space and those vast shopping malls?

Some have been put on hold or are yet to fill up, but again the evidence around the country is patchy. Figures produced by one retail investment vehicle yesterday showed that overall sales are up at Meadowhall in Sheffield, one of the biggest out-of-town centres in the UK, and 23 new leases have been signed with retailers and a further nine with restaurants and caterers.

It’s a confusing picture, which in Edinburgh’s case may also be further confused by the deterring impact of the trams, or, as happened last year, by a sudden fall of heavy snow.

It’s a brave analyst who predicts with any confidence how much consumers will spend this Christmas, but there is enough evidence to suggest some will want to spend their way out of the gloom.

Foreign-owned it may be but car industry still a driving force

THE car industry may no longer be in British hands, though it continues to provide the backbone to the manufacturing industry.

Ford, Honda, Nissan, Toyota and Vauxhall… all foreign-owned but all in rude health after the industry overcame its image for industrial unrest and poor quality products.

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Toyota is the latest to announce a substantial investment, creating 1,500 jobs in Derbyshire and providing a huge stimulus to the components industry that the Prime Minister wants to revive.

The coalition is keen to rebalance the economy and this is one positive sign of life in manufacturing.

The designer Sir Terence Conran recently said it was important that the nation made things (as against simply assembling them, or providing services) and this latest announcement shows that with the right conditions companies will invest.