Guardian UK: Here comes the global recession - let's eat, drink and be merry

[marmar]

Here comes the global recession - let's eat, drink and be merry
Confectioners, pubs and resorts benefit as consumers seek out simple pleasures

David Teather and Chris Tryhorn
The Guardian, Thursday July 31 2008



Banks are losing billions of pounds, the building industry has mothballed new developments and cut thousands of jobs, and retailers are slashing prices to get through the credit crunch. Research published today reckons that consumer confidence is at an all-time low.

But it is not all doom and gloom. Cadbury, the confectionery group, yesterday reported a 46% rise in profits during the first half of the year, pointing to the truism that consumers have not stopped spending, they are just trading down. "No matter how bleak economies look, people always go for treats and that's why we have seen no real slowdown," said the company's chief executive, Todd Stitzer.

The department store John Lewis has a bird's eye view of what shoppers are spending their cash on. They are delaying purchases of big items, such as sofas, and instead spending more on accessories: sales of John Lewis's range of £15 silk cushions are up 13% in the past 10 weeks against the same period in 2007 according to the retailer's director of selling operations, Nat Wakely. "They are spending more on tarting up their existing furniture," he said.

Sales of saucepans and coffee makers are up at John Lewis, perhaps an indication that people are eating out less. Shoppers are also spending more on refitting their kitchens (up 8% in the first half on last year) and bathrooms, Wakely said, as fewer people move home.

Richard Hyman, a strategic adviser at Deloitte's consumer practice, said the downturn was forcing consumers to distinguish between products they need and those they just want. "People are cutting spending in areas where they don't need," he said. "They're revisiting their spending priorities and cutting costs accordingly." The retailers best placed to weather the slump were the ones that could show good value for money, he added. "This is the kind of climate where value comes to the fore, but there's more to value than low price - even rich people have less to spend than they did." ............(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/jul/31/retail.fooddrinks

[Leopolds Ghost]

1. Sounds good to me. But some of these do not follow. Besides, Time mag says we are not hurting.

The "Curious Capitalist", a new Time columnist, says so.

-- kitchen remodelings generally track real estate turnover as people attempt to buy "depreciated" homes and mansionize it or paint lipstick on a pig in an effort to take advantage of a hot real estate market. Given that it seems like kitchens get remodeled by yuppie newcomers every single time a house is sold, why would remodelings increase with a decrease in home turnover?