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Consumers regaining confidence

By Donald C McFetridge

Published 25/05/2015

It appears these days that it was not just Shylock in Shakespeare's The Merchant Of Venice who was looking for a pound of flesh. Today's canny consumers are on the lookout, too - especially for bargains.

The good news is that, according to the latest Office for National Statistics (ONS) figures, consumers (including those in Northern Ireland) are at last spending.

In April UK retail sales rose by an encouraging 1.2%, the strongest increase since November 2014, with higher temperatures helping to account for the increase as shoppers started to stock up on summer clothes in anticipation of the promised more clement weather we're all expecting.

Sales of clothing, footwear and textiles jumped by an astonishing 5.2% in April from March, the largest increase for four years.

All these are signs that consumers are helping to drive the economic recovery. This pattern of spending has, of course, been greatly encouraged and helped by a period of low inflation and rising wages, which helps to drive overall consumer confidence.

The latest results from Marks & Spencer also add to the undeniable fact that consumers are at last feeling more confident about spending.

However, they are spending very specifically in a limited variety of product categories and at certain price-points, notably in the discount and value sectors.

We have witnessed a period of quite radical consumer spending behaviour, where shoppers are seeking out bargains, and the most successful and visionary retailers are struggling to meet this change in consumer demand.

I have long held the view that, when the recession was over, consumers - who had learned how to shop differently - would not revert to their previous shopping behaviour. And this has proved to be an accurate assertion.

Nowadays, consumers worldwide are shopping very differently from how they did five or more years ago. They have learned to price-compare, shop around and seek out the best product at the best available price.

But at least they are now spending, which must be a very encouraging sign for those operating in what is still a very competitive retail marketplace.

  • Donald C McFetridge is a retail analyst at the Ulster University Business School

Belfast Telegraph

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