The city buzzed with a financially optimistic Q4 2013, and the anticipation of a fat and prosperous Christmas and New Year.
The Scotsman spoke of increased high-street spending, The Mirror muscled in on the topic with “online Christmas shopping boom as November spending rises by 20% on last year”, and Reuters dutifully reported that UK shoppers were set to spend £1.4bn pounds this Christmas (according to Deloitte’s Christmas research).
It has often been mused that the output of the media has a huge part to play in the patterns of consumer spending. This makes sense; when a child is told that it has more money to spend it will tend to buy more more sweets in the shop.
So the media-hooked consumer will read in his chosen paper that economic growth has returned and his wallet will immediately (seem to) feel a little heavier.
One would have expected, therefore, that the “good news” tale of Christmas spending being told by the UK nationals would have caused a proliferation in the amount of money being spent by a more positive consumer.
However, this was not the story that was told this week. This week’s papers reported a completely different story; a story of slashed prices and huge discounts.
This was in response to a survey conducted by the London “big-four” firm PwC. The survey’s statistics revealed that 72% of high-street retailers have been forced to offer discounts of an average of 46% in a last-bid attempt to lure Christmas shoppers into stores and spend the money that is so desperately needed to keep the high-street in action.
As Steve Hawkes of The Daily Telegraph reported: “As well as the cuts at M&S, Debenhams is running a half-price sale, Gap and Austin Reed are offering up to 60 per cent off selected items of clothing, House of Fraser has cut prices by as much as 75 per cent and Argos has launched a half-price toy sale.”
Had the papers been too optimistic about “the health of the consumer”? Had the retailers assumed that consumers were feeling bonny with this recent flow of good economic news, and so were consequently left in the lurch when this optimism didn’t translate into the expected increase in revenue?
Or, has the consumer finally digested the lesson of 2008 and learnt not to take optimistic reporting at face value?
In short, the recession of 2008 was due to the bubble of a few years of optimistic borrowing and spending bursting, and it had disastrous consequences for the spendthrift consumer.
Is it possible that the positive articles that might once have been taken at face value and used as an excuse to hit the high-street are now being digested in a much more thoughtful, cautious and measured manner? Consumers are still reading and being influenced by the media, but perhaps now they are considering the memory of the dark years following the over-optimism of 2008 and keeping their purses firmly zipped.
Abchaps had a busy week in the City and beyond, including a rugby match with Smith Williamson at The Stoop. Tuesday brought our team Christmas party, where supper in the trendy area of Shoreditch preceded the awesome Pongathon at Richmix for a table tennis tournament which saw fierce competition and tears from the losers. We also enjoyed Farrer & Co's Christmas drinks party.
KPMG have announced that Tony Woodhams will head up their Trading Risk Solutions Group. The former trader will bring his 17 years experience as at institutions such as Credit Suisse, HSBC and Marex Sprectron his new team.
This is not the only senior hire to take place; Coutts have announced John Etheridge will be Head of Product and Fiona Whitehead will take the lead as Head of New Business, bolstering the Company’s International Trust Business Team. At Herbert Smith Freehills Sonya Leydecker and Mark Rigotti, former Head of Banking and Head of Corporate, have been appointed as joint Chief Executive, making them the 1st leading law firm, with revenues over £500m to appoint a female CEO.
'Black Friday' - the start of the Christmas shopping season when retailers launch their promotional holiday sales. Usually the last Friday in November to coincide with the last pay day before Christmas.
Is the thought of one more mulled, minced or market-based activity met with a slightly weary sigh? Well, there are other ways you can keep the festive cheer going in the city this weekend!
Freshen up after a week of indulgence and head over to the Tower of London Ice Rink where you can hit the ice from 10:00am onwards with the grandeur of one of the capital’s most iconic landmarks providing a backdrop to the hour long sessions.
Abchaps love a good sing song and so it’s a good thing there are plenty of carol concerts taking place too. Fleet Street Carols are a fantastic opportunity to sing alongside St Bride’s own choir at either noon or 5pm, so take 5 minutes out and enjoy a little serenity in the run up to Christmas.
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