So what’s it like at street level, then, this recession? What does our friend the shopkeeper make of it all? What’s going down on the high streets and by-streets of the capital?
Londonist has spent the last week chatting to shopkeepers big and small to see what they really really think of it all. And the answer is: not a lot.
As our own very clever econom-ist has pointed out, the recession on paper, or in the papers, is likely to be quite a different thing from the reality experienced by Joe Public or Roger Retailer.
Any shopkeeper will tell you that the ‘economic downturn’ started about two and a half years ago. Christmas 2006 was not what it should have been. The reason we are reading so much about it now is obviously because world markets have taken a plunge, and there are lots of high-powered heads rolling. Those companies which are large enough to have shareholders and other add-ons are becoming embroiled. But sales this year are not significantly lower than the previous two years, and in fact there is a certain bullishness about the British spending public: they refuse to be recessed and hate being told what not to buy.
As our mole at Debenhams has pointed out, most of the big stores are ‘fighting back’ with dramatic sales which provide at best false financial barometer readings. For this reason this theatrical VAT cut is having very little visible impact. Medium sized stores are mostly arranging for the 2½% VAT to come off at the PoS (point of sale, as they say in the trade). Shops such as the many pound emporia are for obvious reasons leaving things untouched (98.8p shop does not really have the same ring). Corner shops with gas powered tills are largely ignoring the change: VAT may have gone down, but costs are still rising, and they simply do not have the man-power to go round manually repricing everything, or the technology to deduct it at the till. A good corner or speciality shop will pass savings on to its customers throughout the year and not just because the government is running scared. The only real place that the VAT cut is making a visible impact is on-line, where the touch of a button magically reduces costs right in front of you: this, even this curmudgeonly blogger admits, is alluring.
So there you go. Plus ca change and all that. We’re off to tend to our garden.