Disappointing figures
have recently been issued showing continued weakness on the High
Street. The volume of sales fell 0.6% in January (compared to January
2012).
The Governor of the Bank
of England, Sir Mervyn King has recently said that spending will have
to shrink before the economy corrects itself. “There is no point
trying to persuade people to spend in the way that they were spending
before the crisis”.
Sir Mervyn has also
warned that inflation will also remain high for at least another
three years. Average earnings are back to 2003 levels according to
the ONS (office of National Statistics) and in the last three years
real incomes have declined as inflation has risen faster than wages.
This is inevitably going
to put pressure on retailers. The decline in January’s sales was
affected significantly by a sharp 2.6% fall in food sales – the
lowest level in almost nine years.
Tim Corfield
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