The retail sector falls back to earth with a bump

September’s sales numbers aren't cause for alarm though.

After a run of reasonably solid growth, September’s sales numbers bring the retail sector back to earth with a slight bump. Growth is still present, which indicates that there is still forward momentum in the consumer recovery, but it has moderated significantly from the relatively heady levels seen in both July and August. While this might be the cause of some initial concern, it should not necessarily be a cause for alarm.

In the first instance, patterns of recovery are rarely even: seeing month on month of ever inflated growth certainly makes for a pleasing looking chart but, judging by historic standards, the exits from downturns are normally characterised by periods of growth which wax and wane. In essence, a reduced growth rate is not an indication of impending doom for the retail sector.

The further point to make is that, to a degree, a shallower growth rate was always to be expected as we exited the summer months. The sun had an overall net positive impact on sales which, when combined with some modest growth due to the natural uptick in consumer sentiment and spending, created some very rosy looking figures. This was never likely to continue ad infinitum, and what we are now seeing is the more natural, underlying growth rate which is reflective of the true pace of recovery.

Of course, the outturn could well have been different should the weather had been firmly on the side of retail. Unfortunately, it wasn’t. As autumn and early winter stock arrived on the shop floor what most retailers, especially those in clothing, wanted was a sharp cold snap; what they got was rather murky but fairly warm and humid weather. This tells us something interesting about the consumer psyche: while many people do have the capacity to spend, large numbers are reluctant to do so unless they feel a real need or justification. Before the downturn it is likely many consumers would have been willing to invest in a new coat in anticipation of colder weather to come; nowadays attitudes have hardened and significant numbers will only buy if and when the need arises. This change, a switch to a slightly more hand-to-mouth pattern of purchasing if you will, ultimately means retail growth rates are much chopper and leaves retailers far more exposed to the vagaries of the weather than they once were.

Our view is that this consumer mindset will prevail, even as we move into recovery. As such, we are unlikely to see retail rocket back to health; instead, it will more likely take a rather gentle upward glide path. Ultimately, the positive news is that, the exactitudes of the numbers aside, upward momentum still remains.

Photograph: Getty Images

 Managing Director of Conlumino

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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.