I want to show you two sets of headlines from this this week’s papers. Here’s set one:
and here’s set two:
- DSG shares fall 27% after warning of dismal Christmas – Independent
According to the first set of articles, consumers enjoyed such ‘excessive Christmas spending’ that one in four faces unmanageable debt. We enjoyed a holiday ‘binge’, a ‘spree’, we ‘lost control’ and spent an unprecendented £34 billion on our credit cards.
And yet, say the high street, we ‘scaled back’, we were ‘nervous’. We did not provide them with ‘the spending bonanza they had been hoping for’, causing ‘gloomy figures’, ‘plummeting’ shares, ‘misery’ and the threat of a ‘tough year’.
Our economy is completely irrational.
What would it take for the high street to have a good Christmas if our highest ever spending, to the point of bankruptcy, is still only ‘dismal’? If we had bought enough to satisfy the high street chains, how many more of us would be in the red, if one in four is not enough? How ironic that we’re the ones called ‘consumers’.
We’re shopping more than ever before, spending like there’s no tomorrow, and destroying ourselves in the process, and yet the Guardian business section ran a cartoon today featuring two aliens looking at the earth through a telescope, and one saying to the other “Still no sign of life on the high street”.
Does anyone else see the staggering brokenness of our consumer economy?
The Earthbound Report 
Hi Jeremy, great post as usual, it’s a crazy world, makes you wonder if consumerism has an end to it? have you read JG Ballard’s Kingdom Come, it’s an interesting novel that heads to the end of consumerism and it’s become a religion.
Anyway, what a small world, I’ll certainly say hi to Jack when I see him next and next time you’re up this way, let me know it would be great to meet you if you have time
You do have to wonder how long we can all keep whistling in the dark. I haven’t read Kingdom Come yet, but I like some of Ballard’s other books so I’ll have to look it up.
I’ll give you a shout next time I’m in the area, definitely.
At some point the economies of developed nations will have to absord the trillions of dollars lost to outright fraud during the last 90s and into 2006. It wasn’t just the real estate boom, let us not forget about the 10 million dollars given to start dot.coms that never launched a site or produced a product. They did leave vendors stiffed all over the country though.
The dilemna facing the politicos now? Do they allow a larger percentage of americans go insolvement so that their spending leading up to it keeps the economy going? That seems to be the way things are headed.
Jeremy,
I was thinking about this after you mentioned these two stories… It’s a great observation, but (and I haven’t read the articles), does set two take online shopping into account or is it just high street shops?
As if it is only talking about the high street proper then the conclusion isn’t ‘our economy is mental’ but just that online shopping is grabbing a much bigger share of the market.
Really good to see you at the weekend
Steve,
The first two in set two are specifically about DSG, which trades in stores and online (it’s Dixon’s, Curry’s and PC World). Most of the businesses mentioned in the third article are the same, but no indication is given as to how internet-only companies have done – amazon in particular could have a very large impact.
Good point, and Amazon had it’s best ever Christmas. However, online shopping only accounts for 5-7% of all retail spending, so it wouldn’t be enough to explain where all the money was spent.
I picked the DSG headlines because they were one of the first and biggest to issue profit warnings. Next, Sainsbury’s and Marks and Spencer had a bad Christmas too, and others are due to report later in the month.