Tuesday, December 30, 2008


lonely and deserted
Originally uploaded by circulating
I don't know if you have read Thomas's prediction for the recession. It is worth a read if you haven't.
I had to drive him into the office this morning as the Express Bus was off on holiday. On the way back I was listening to Radio Clyde - not my usual but that Wogan man was probably on Radio 2 and I wasn't going to risk turning it on just in case. There was a male DJ on rabbiting on about the recession and the sales. He was pointing out that he didn't believe the recession was as bad as people were saying given the sales were so good the shelves in his local Comet and Currys were all empty and big red Out of Stock signs were appearing everywhere.
Let's just analyse that for a minute. People have bought the TVs and laptops in particular but the shop is not restocking despite queues of customers wanting to buy things. Could it be they haven't any credit to restock? Could it be that selling the old stock isn't generating enough money to buy new stuff given the new items will need to be bought abroad with newly devalued pounds but the money they are making is on 50% reduced goods bought with the old strong pound?
I was in the Early Learning Centre yesterday returning a faulty Xmas present. The assistant in there was equally puzzled. We have no stock of these items in any other the Glasgow shops or in the warehouse she said surprised. Hmmmm - another shop which is selling everything 50% off minimum but not restocking shelves. Something deeply sinister is going on and the blinkered shoppers are only seeing what they want to see.
I predict 3 things:
  • The shops that don't make enough to restock will go bust in the next 6 weeks and these will be big chains like those that have already surprised many of us.
  • Some shops will restock but prices will increase by at least 30% to cover the devalued pound.
  • Other shops will start sourcing inferior goods originally meant for the 3rd world markets so that they can continue to sell things at what people consider a reasonable price but the buyers will soon realize what is going on.
Anyone who believes this is good for British manufacturing doesn't realize how many years it would take to reacquire the old, lost skills and how few months we have to do it.

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