Published on: 21st June 2024
Yesterday was the summer solstice – the longest day of the year. Yes, the summer may only just have arrived, but essentially from here on in, the days get shorter, and the nights get longer. I bet that’s cheered you up, hasn’t it?!
Hopefully the fleeting glimpses of sun we’ve had this week – and the tantalizing promise of a rather glorious weekend and week ahead – will have kickstarted sales of outdoor toys. We saw in last month’s Circana data the difference that even a couple of sunny days can make (outdoor sales were up 5% in May, turning the overall market positive for the first time in a while), so a prolonged period of good weather can only be a good thing. A bit of sun, England unbeaten at the Euros, the hope of a fresh start for the UK in a couple of weeks’ time… if that doesn’t cheer everyone up, I don’t know what it will take. And imagine how good it would be if we actually win the Euros (remember which government was in charge the last time the England football team won a major tournament…just sayin’).
There was further encouraging news this week when it was announced that inflation had come down to 2%. We won’t get any change in the interest rate until at least August, but the prospect of a modest cut in the autumn just got a step closer. That said, it’s important to keep the inflation drop in perspective: prices are still rising, and they’re rising from a base which is 20% higher than when inflation was last at target. In the three years prior to this period of inflation, prices had risen by just 5%. So, everything still costs a lot more than it did a few years back, and pressure on consumer budgets remains – just a little less pressure than before.
Data company Kantar’s latest research makes interesting reading: last month’s survey recorded a rise in people feeling better about their finances, with over one-third of the 10,500 people surveyed describing their financial position as “comfortable” – and just today, the Office for National Statistics (ONS) has reported a “better than expected” increase in retail sales in May. However, almost 25% admitted that they were still “struggling.” And there, in a nutshell, is the conundrum for retailers: a percentage of their prospective customers are feeling more optimistic about their finances, while a similar number are still finding things tricky. Let’s hope that the balance continues to tip in favour of people feeling more optimistic as we head towards the festive season.
Read the rest here.
