To let you know what’s happened on the High Street this Christmas, it was tempting to just paste in the same article from a year ago. There are certainly lots of similarities.
Next, just like this time last year, is worried. It said that it is “extremely cautious” for the prospects of 2008, and between July and December like for like sales at the retailer were down 2.3 per cent.
It was a tale of woe from DSG International (that’s the retailer formerly known as Dixons) too, as it issued a profits warning. During the 11 weeks to 29 December like for like sales were down 1 per cent, but computer-based sales were down a distressingly high 11 per cent.
“Overall trading for this important period, in which over half our annual profits are usually generated, has been disappointing, particularly in the UK, Italy and Spain,” it said.
The DSG results seem to be a good reflection of the broader trend too, with online sales soaring.
Yet, while DSG and Next had the markets worrying, John Lewis and Marks and Spencer, the two stars from last Christmas, were celebrating.
Well actually, MS has not come clean yet; it is due to announce its trading update on Wednesday, but the feeling out there is that while all around there was misery, sales at Marks will have lifted.
Mind you, expectations are that MS will reveal a lower sales increase than last year or the year before.
Meanwhile, at John Lewis sales soared by 8 per cent in Christmas week. It appeared to be all systems go at the retailer, with Waitrose and online sales booming too.
Looking at the broader picture, it does appear that we are seeing striking divergence in the inflation picture.
On the High Street, sharp discounting is helping to put downward pressure on the inflation rate. Apart from, that is, with food prices, which are of course soaring, but is that due to a one-off series of bad harvests and therefore non-inflationary, or is it down to climate change, in which case we must be seeing inflationary pressure build.
On the other hand, with oil up there at $100, with our utility bills due to soar later this year, there are plenty of other reasons to fear rising inflation.
But at least some good news came from the Chartered Institute of Purchasing and Supply.
The CIPS purchasing managers index fell in December, but then again at 52.9, it is still above the critical 50 no-change mark.
But more to the point, the index for tracking prices charged by manufacturers fell from 57.5 to 55.6, the lowest level since last March.
The economic prospects for 2008 hinge on inflation, and on whether the Bank of England’s trading update on Wednesday can lower rates enough to avoid recession.
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