fellow Posted January 29, 2011 Share Posted January 29, 2011 http://www.mirror.co.uk/news/city-news/2011/01/29/shop-sales-stall-as-vat-rike-kicks-in-115875-22882909/ THE first drop in takings at John Lewis for two years was being seen as a grim pointer to a wider High Street slowdown yesterday. The department store chain revealed its sales slipped 2.2% to £50million last week but stripping out the higher VAT rate experts said the fall in takings would have been close to 5%. “It was a quieter week for John Lewis but the comparisons against last year are difficult to read due to the weather,” said a spokeswoman. Fashion fell 3% while sales of electrical goods and technology slumped 3.7%. At the same time, an NOP survey showed the sharpest fall in consumer confidence since 1992. Howard Archer, chief economist at Global Insight, said: “The John Lewis figures suggest consumers are becoming less prepared – or less able – to spend.” He blamed the increase in VAT from 17.5% to 20%, and wages failing to keep pace with rising living costs. His comments echo those this week from Bank of England governor Mervyn King who warned family finances are facing the biggest squeeze since the 1920s. John Lewis has been one of the best performers on the High Street so analysts warn that if they are suffering others could. The CBI said sales were slowing in January due to the VAT rise although this was partly offset by discounting. May stores, particularly fashion chains, have slashed prices by up to 70 per cent in a desperate bid to persuade people to part with cash for things they would like, rather than need. So people are cutting their spending by as much as VAT has risen. It looks as though the VAT rise is having the exact opposite effect than what the government wanted i.e. VAT tax revenue has FALLEN by 2.5% rather than rising by 2.5%. This will also lead to more unemployment and therefore less income tax as well. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted January 29, 2011 Share Posted January 29, 2011 I have halved my driving, cut out 90%* of the wine I used to drink and buy bargains at Waitrose, Co-op and Tesco. Hit 'em where it hurts! _________________ Suddenly lost the taste for it about a month or so ago. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 29, 2011 Share Posted January 29, 2011 Aggregate demand being affected shocker. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted January 29, 2011 Share Posted January 29, 2011 If demand tanks prices will drop, jobs will be lost and inflation will rapidly fade away and turn into monster deflation. Can't raise prices if people don't buy and there is a huge amount of room for people to cut back. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 29, 2011 Share Posted January 29, 2011 If demand tanks prices will drop, jobs will be lost and inflation will rapidly fade away and turn into monster deflation. Can't raise prices if people don't buy and there is a huge amount of room for people to cut back. wrong. If demand drops, prices will compete, the indebted firms will fail, leaving the remaining demand to the prudent, value adding businesses....they will prosper, debt will be defaulted and recovery will commence. reduction in credit will lead to deflation...ie, your wages will buy more....which is the way technological change naturally takes us...bigger, better, faster, more efficient. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted January 29, 2011 Share Posted January 29, 2011 I have halved my driving, cut out 90%* of the wine I used to drink and buy bargains at Waitrose, Co-op and Tesco. Hit 'em where it hurts! _________________ Suddenly lost the taste for it about a month or so ago. Can someone explain the idea behind why Waitrose think their advert is any good? "We are the same price as Tesco on 1000 branded items" I think Tesco is expensive on branded items and there are lot more than 1000 of them. So Waitrose are saying to me, we are as expensive as Tesco on 1000 items but more expensive on all the others. It seems more like an advert for Tesco! Terry Leahy will be pleased with your bargain hunting. He reportedly got a 71% rise from £9.1m to £15.6m. Quote Link to comment Share on other sites More sharing options...
fellow Posted January 29, 2011 Author Share Posted January 29, 2011 If demand tanks prices will drop, jobs will be lost and inflation will rapidly fade away and turn into monster deflation. Can't raise prices if people don't buy and there is a huge amount of room for people to cut back. I think it is looking odds-on for a 2nd quarter of 'negative growth', and therefore the long awaited double dip recession (depression). And they can't even blame this quarter on the snow! Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted January 29, 2011 Share Posted January 29, 2011 The Labour Party Rag says retail sales are dropping because one store John Lewis says sales flat. What great investigative journalist that is. The CBI released it survey of all retail in Jan and predictions for Feb. Here it is. http://www.finfacts.ie/irishfinancenews/article_1021503.shtml Retail sales grown in Jan (Fact) and predicted to grow in Feb by the retailers themselves. Which one do I believe. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 29, 2011 Share Posted January 29, 2011 I think it is looking odds-on for a 2nd quarter of 'negative growth', and therefore the long awaited double dip recession (depression). And they can't even blame this quarter on the snow! I think the second quarter negative is a cert now but they will dismis it as technically not being a double-dip due to the snow before Christmas... so it will have to drag on into the third quarter to become a double-dip proper... which means another dragged out painful year for HPCers. Quote Link to comment Share on other sites More sharing options...
fellow Posted January 29, 2011 Author Share Posted January 29, 2011 I think the second quarter negative is a cert now but they will dismis it as technically not being a double-dip due to the snow before Christmas... so it will have to drag on into the third quarter to become a double-dip proper... which means another dragged out painful year for HPCers. It doesn't matter if it is official or not. The effects on the economy and house prices will be real. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 29, 2011 Share Posted January 29, 2011 It doesn't matter if it is official or not. The effects on the economy and house prices will be real. I can understand and foresee the affect on the economy but on house prices? Hmm, not so sure. Quote Link to comment Share on other sites More sharing options...
SarahBell Posted January 29, 2011 Share Posted January 29, 2011 In reality it's probably not the vat hike ... maybe the credit cards have dried up, the bank overdraft being reduced and credit limits being reduced. Quote Link to comment Share on other sites More sharing options...
fellow Posted January 29, 2011 Author Share Posted January 29, 2011 I can understand and foresee the affect on the economy but on house prices? Hmm, not so sure. More people losing, or in fear of losing their jobs, wages stagnating or falling, less disposable income, more people defaulting on debts, more repossessions, less money available for mortgages, banks tightening lending criteria. Exactly as happened in the first dip. Quote Link to comment Share on other sites More sharing options...
Peppa Pig Posted January 29, 2011 Share Posted January 29, 2011 I have halved my driving, cut out 90%* of the wine I used to drink and buy bargains at Waitrose, Co-op and Tesco. Hit 'em where it hurts! _________________ Suddenly lost the taste for it about a month or so ago. SO you have slashed your personal standard of living. I guess, they must be really smarting right now ??? Quote Link to comment Share on other sites More sharing options...
BlinkTooFast Posted January 29, 2011 Share Posted January 29, 2011 I have... cut out 90%* of the wine I used to drink... Suddenly lost the taste for it about a month or so ago. Same happened unexpectedly to me and TOTMBO about 18 months ago, and it was pretty easy to point a finger to the reason. Bought an E61 based espresso machine, grinder, bean roaster, and some sacks of decaf green coffee beans from different countries. Started making lots of espressos & cappucinos. After a few weeks we noticed that we had stopped drinking wine pretty much overnight the same time that we got the coffee equipment. Ended up being a net cash saving and no more hangovers. Brilliant! Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 29, 2011 Share Posted January 29, 2011 Same happened unexpectedly to me and TOTMBO about 18 months ago, and it was pretty easy to point a finger to the reason. Bought an E61 based espresso machine, grinder, bean roaster, and some sacks of decaf green coffee beans from different countries. Started making lots of espressos & cappucinos. After a few weeks we noticed that we had stopped drinking wine pretty much overnight the same time that we got the coffee equipment. Ended up being a net cash saving and no more hangovers. Brilliant! What is a TOTMBO? Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted January 29, 2011 Share Posted January 29, 2011 What is a TOTMBO? The One That Must Be Obeyed Sometimes SWMBO is you are non PC. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 29, 2011 Share Posted January 29, 2011 The One That Must Be Obeyed Sometimes SWMBO is you are non PC. Ah. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted January 29, 2011 Share Posted January 29, 2011 SO you have slashed your personal standard of living. I guess, they must be really smarting right now ??? If you times it by millions of people it starts to hurt. We are all part of a herd in some way or other. My standard of living hasn't really been affected as I seem to have gone off wine and plan drivng more strategically. So far, my drinving has plummetted at least 50% and I am feeling quite smug about having deprived the giovernment of that much tax revenue as punishment for hiking petrol a few new P. I notice that wine that used to go "on sale" at Tescos for £3.99 is now £4.49. So cutting down 2-3 bottles a week has cost the government quite a bit if 6 million other clever sods do likewise. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted January 29, 2011 Share Posted January 29, 2011 What is a TOTMBO? I think its just another shorthand--for The other things make better offers BIANRTS (But I am really not too sure). Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 29, 2011 Share Posted January 29, 2011 Product quality is way down as well, on my 3rd 2nd from the top of the range Panasonic microwave combi in 40days. Getting bored taking things back doing a 30mile round trip becuase its broken, another reason to stop spending! They used to make those in Wales but moved them off to Asia a few years back. Quote Link to comment Share on other sites More sharing options...
BlinkTooFast Posted January 29, 2011 Share Posted January 29, 2011 I think its just another shorthand--for The other things make better offers Lazy me. Was definitely The One That Must Be Obeyed Quote Link to comment Share on other sites More sharing options...
headrow Posted January 29, 2011 Share Posted January 29, 2011 If you times it by millions of people it starts to hurt. We are all part of a herd in some way or other. My standard of living hasn't really been affected as I seem to have gone off wine and plan drivng more strategically. So far, my drinving has plummetted at least 50% and I am feeling quite smug about having deprived the giovernment of that much tax revenue as punishment for hiking petrol a few new P. I notice that wine that used to go "on sale" at Tescos for £3.99 is now £4.49. So cutting down 2-3 bottles a week has cost the government quite a bit if 6 million other clever sods do likewise. So RB, your driving has been cut back by 50% and you think more people all over the world will be doing this? Then why are you holding shares in Ford? I bet you have shares in Blossom Hill and Jacobs Creek too? Quote Link to comment Share on other sites More sharing options...
Stars Posted January 29, 2011 Share Posted January 29, 2011 A vat rise means people get less return for adding value - As we need to shift the economy from value collection (real estate) to value production (goods and services) the rise is a move in the wrong direction. Quote Link to comment Share on other sites More sharing options...
headrow Posted January 29, 2011 Share Posted January 29, 2011 I like beer, food ,driving. Why should i give up something i like? To save the 2.5% on what i spend i'll give up something else instead. Turn the heating off an hour earlier or reduce what i donate to charity. Selfish? Very. But i reckon this is what the majority will do. Quote Link to comment Share on other sites More sharing options...
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