Saturday 22 March 2008

A rant today........

I am a little perturbed, I am also a little surprised that there seems to be some sort of pleasure caused by these results...............

What am I talking about? I am talking about my understanding why retail sales seem to be higher in February.

Let us look at things realistically - Fuel is at an all time high, Energy costs have risen by a frightening amount over the last few months and are at an all time high. House price rises are making it increasingly impossible to get on "the housing ladder", inflation is running at 2.7% against a target of 2%, and if we are honest is probably running a lot higher than 2.7% but the addition is hidden within government released and managed figures.

Everywhere that the average person turns in an attempt to manage day-to-day life additional taxes, costs and expenses .

So let us look at a situation, the retail sales index is showing a rise, it would appear that sales through the tills in February have risen above expectation, potentially this is giving hope to the high street.

Now call me a cynic, and I apologise for possibly bursting the bubble, however, are sales not higher as the costs associated with living are higher. If a tin of baked beans was 30p in January and 40p in February the associated sales will be higher. I realise that a tin of beans is only one product, and I use it only as an example, but, this one item highlights the rising costs. If an average shopping bag has risen then it is obvious that the retail sales will also have risen. What will have fallen is the value for money and the physical number of items in the bag.

If we add into the sales hidden costs the actual money in the tills rises further. When are consumers going to realise that the average retailer (Tesco, M&S etc) are anything but stupid and will jump on any bandwagon that may reap higher profits, turnover and money in the till.

So what are the latest - The Green Portfolio and the Organic bandwagon.

Suddenly shops such as Tesco are charging 5p per carrier bag they supply. An average weekly shop needs 20 bags so we have just added a £1 onto the bill. £1 is not a lot to add to a bill, few people even notice. Multiply it by the weeks shoppers and suddenly the supermarket has a few more million pounds. The government takes some as a "green tax" and the supermarket gets the rest. Win, Win and........... loose the consumer looses again!!!

Next everyone is worried about organic food. I agree that organic food must be better by definition. I am sure it tastes nicer and I feel much better by doing my bit for the environment. But I also am adding at least £10 to my cost at the till. The question is does the retailer have an increased cost in relation to this? Or is the retailer using its usual tactics and is telling the supplier of goods that they will only pay XX amount, regardless of their sales price. Add to this, again, the government "green" tax and once again we are faced with a win, win.............Loose situation.

And so my rant could continue, if the chancellor decided to hold off adding another 2p to fuel prices, why have the petrol retailers increased their prices by at least this amount. I have a 70 Litre tank, I paid £80 for diesel yesterday. I get 8 miles per litre allowing for me doing decent runs. This is around 14pence per mile in fuel. My wife, who due to her small journeys, equally as important as mine is lucky to see 30pence per mile, over a 60 litre tank this is higher still.

So is are retail sales really rising showing hope in the high street. I would say "NO" everyone I know is also having to pull in their belts and a now getting much less for their money. I do not want to be the one to state the obvious, I do not mean to burst the high street bubble but, and i am sorry, I cannot are beginning to turn around and how the high street is really looking good.

Perhaps your comments on this can help agree with me or put me straight................

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