The ghosts of high streets past come out to play

The Sunday Telegraph - Money & Business - - Business - Ben Mar­low

Per­haps it’s the darker nights, or that Hal­lowe’en is ap­proach­ing, but a strange mood hangs in the au­tumn air. That’s the view of one ma­jor re­tailer who told me this week that the British con­sumer is be­hav­ing strangely, in ways he’s never seen be­fore. De­spite signs that the econ­omy is go­ing back­wards, UK house­holds are still spend­ing. Usu­ally one tracks the other but that isn’t hap­pen­ing at the minute.

Con­sumers are still tak­ing hol­i­days, eat­ing out, and buy­ing clothes and food. Credit card debts keep ris­ing. And de­spite an as­sump­tion that the UK is in long-term, ir­re­versible de­cline, the high street has just had its best Septem­ber in five years. Un­em­ploy­ment is in­cred­i­bly low, wages are tick­ing up again, and petrol still cheap. There are rea­sons to be up­beat.

How­ever, there are also signs that the con­sumer is clearly ner­vous. One large chain mea­sures the mood of its cus­tomers by the colours they’re wear­ing. Right now, peo­ple are favour­ing blacks, blues and greys, sug­gest­ing a som­bre air. They are hy­per-sen­si­tive to the weather too.

No won­der. In­fla­tion is bit­ing, the pound is be­ing squeezed. Brexit is stok­ing un­cer­tainty, and an in­ter­est rate rise is ex­pected soon. Mean­while many firms are hes­i­tant about in­vest­ing and still not hand­ing out pay rises.

In short, the pic­ture is in­cred­i­bly mixed, cre­at­ing a night­mare for any re­tailer try­ing to pre­dict be­hav­iour and trends. Against this con­fus­ing back­drop, sev­eral of the UK’S long­stand­ing big names are slowly get­ting their mojo back.

Tesco still has lots to do but its re­cov­ery is tak­ing shape. Mor­risons is con­found­ing all ex­pec­ta­tions with the strong­est re­vival of all the su­per­mar­kets, while the pair­ing of boss Steve Rowe and new chair­man Archie Nor­man threaten to trig­ger Marks & Spencer’s long-awaited come­back.

We keep be­ing told that the likes of Ama­zon and Zara are lay­ing waste to those stick­ing with old-fash­ioned bricks and mor­tar. Soon all our shop­ping will be done on­line and stores will be noth­ing more than a place to pick up or­ders in record time. There is no doubt the high street is un­der fierce as­sault but the tra­di­tional names are slowly demon­strat­ing that there is still a place for them too.

‘Con­sumers are still tak­ing hol­i­days, eat­ing out, and buy­ing clothes’

Chan­cel­lor’s a lit­tle late to the party

One won­ders where Philip Ham­mond has been for the last few years. In a rous­ing speech at the Tory party con­fer­ence, the Chan­cel­lor called on busi­ness to stand up for free mar­kets.

It wasn’t a plea for party po­lit­i­cal sup­port, he in­sisted – busi­nesses should ex­press their sup­port for the cur­rent eco­nomic sys­tem amid the re­newed spec­tre of re­na­tion­al­i­sa­tion and large-scale state in­ter­ven­tion.

His call to arms was all very ex­cit­ing but who’s he try­ing to kid? It’s not that he’s wrong – busi­ness lead­ers should be speak­ing out on these is­sues. As our big­gest em­ploy­ers, they have a re­spon­si­bil­ity to be vo­cal on mat­ters that could af­fect the liveli­hoods of em­ploy­ees and over which they have the power to in­flu­ence.

How­ever, the large ma­jor­ity learnt a painful les­son from the fi­nan­cial cri­sis. There is lit­tle to be gained from be­ing vo­cal on wider is­sues. Rather than stim­u­lat­ing proper de­bate, such courage tends to in­vite abuse. Com­pa­nies quickly be­come tar­gets, whip­ping boys for so­cial dis­con­tent. The risks far out­weigh the gains.

Ham­mond knows this. He saw what hap­pened to Ste­fano Pessina, the bil­lion­aire be­hind Boots, when he ex­pressed reser­va­tions about Ed Miliband’s eco­nomic pro­pos­als in the run-up to the 2015 gen­eral elec­tion. The back­lash was gen­uinely shock­ing.

As it hap­pens, many fig­ures we con­tacted were brave enough to take up Ham­mond’s chal­lenge, so hats off to them, per­haps re­as­sured that sup­port for mar­kets isn’t the same as sup­port for one party. Most bosses though are ter­ri­fied of ex­press­ing a view for fear of be­ing ac­cused of play­ing pol­i­tics.

What is par­tic­u­larly galling is that this is a gov­ern­ment that has done very lit­tle for cor­po­ra­tions since com­ing to power. En­gage­ment with busi­ness has been al­most non-ex­is­tent and some of its own neg­a­tive rhetoric has helped to lend cred­i­bil­ity to Left-wing in­ter­ven­tion­ist threats.

Ham­mond’s cry was an un­con­vinc­ing and des­per­ate ploy from a gov­ern­ment pan­ick­ing over a resur­gent op­po­si­tion.

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