17 Oct Cautious flow of the Disposable Income
As compared to September 2011, 2012 experienced more Britons letting loose their disposable incomes on shopping. Sales rose by 1.5% as informed by The British Retail Consortium. Though the customers can’t be classified as spendthrifts but they definitely have put a stop to postponed spending.
Even though the month of Olympics was expected to increase sales with an increased footfall of tourists, it failed to do so. September saw more sales as compared to August when sales dipped 0.4% year-on-year. Sales of children’s clothes rose in September as parents did the back-to-school shopping which they had put off in August. The sudden onset of wintry weather in mid-September also helped drive sales of jumpers and coats.
Victoria Clarke at Investec says that economic backdrop is not synonymous to people’s circumstances, needs and the appetite to spend, i.e. if someone needs a coat to survive the winter, they will go and buy it if they can, despite of the economic backdrop.
With respect to the seen rise in retail, The Royal Institution of Chartered Surveyors said that sales by the end of the year should retrace its height. London, on the other hand has been reported as the only region where prices are rising rather than falling.
House prices are still falling but at a slower pace. Clarke said that this too will stabilise and 2013 will see modest growth in house prices. The organisation said chartered surveyors’ expectations for sales had risen due to the government initiatives such as the “Funding for Lending” scheme, which would make it easier for prospective buyers. This scheme is designed to encourage banks and building societies to offer more loans to revive the market. The final three months of 2012 are the much awaited months as the respondents are keeping their fingers crossed for a definite acceleration in sales.