Wednesday, Dec 10, 2008
Unemployment will shoot up after Christmas!
MoneyWeek: The silver lining to bad employment news
"Andy Miller, a major commercial real estate player with several million square feet of retail space, says that many of his retail tenants have told him they're going to shut down their stores after Christmas. Christmas is the most profitable time of the year for retailers. If Miller's right, they'll sell as much as they can leading up to Christmas, then they'll fire their staff and vacate their properties in the new year. It's not just retail properties closing down and firing employees. Miller says there's a crisis coming in all commercial real estate. He says it feels like a slow-motion car wreck. If a crisis in commercial real estate develops, you should anticipate some of the worst unemployment data since the Great Depression."
Posted by drewster @ 11:27 PM (643 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. drewster said...
On the retailing front, understand the following:
1) The pound is falling, making imported goods more expensive
2) As a nation we have spent the last decade running up household debt to its limit; now we have to start paying it back. This means buying less stuff.
3) People who fear for their jobs are going to buy less stuff
4) People who no longer have jobs are going to buy a lot less stuff
5) People who have left the country are going to buy no stuff at all
If I were a shop-owner with thin profit margins, I'd do what the guy in the article says: flog as much tat as possible before Christmas (and in post-Christmas sales), then close up shop. There's no point in paying hefty commercial rents and business rates when your business isn't even making money.
I wonder what the people of Britain will do instead of going shopping? It has become the national pastime; on sites like MySpace people describe their hobbies as "shopping". Will they all change it to "window-shopping"? Or will it become "shopping for cheap stuff at Primark" instead of at Harvey Nichols?
2. crashpad4me said...
Or emigrating?
3. paul said...
Where is the silver lining?
4. it_is_going_with_a_bang said...
The stock market going up on the news that the fed would be expected to get even more desperate due to the terrible stats?
Nice for the stock market but not so nice if you're a statistic.
5. drewster said...
Yeah, the problem with silver linings is that there's still a great big stormcloud in the middle!
6. Japstick said...
I'm an independent retailer, used to have three shops ( designer furniture ) now only operating from one. This contraction has been in the last 12 months, partly due to trading conditions and partly because I saw the approaching storm over 12 months ago and made the call.
I can tell you, in my industry and many others, sales since October have literally STOPPED. I like many other independent retailers have slashed margins to the extent where we will be unable to restock for the new season. Most retailers I know, in many industries, will be having a fire sale in Jan to shift remaining stock at whatever price they can realise before calling it a day. Expect carnage on the high street by March.
7. inbreda said...
the effect of internet shopping is massive as well. And guess what - we tax dodgers in the channel islands remove those profits from the uk as well. Places like hmv, 7dayshop and play.com have packaging plants over here to take advantage of a loophole that says goods under £18 aren't charged VAT. Another poke in the eye for the uk tax take.