Published 18/11/2012 | 05:00
Who'd like to smell like Britney? Or J-lo? Lots and lots of people by all accounts. Boots Ireland has seen sales of celebrity fragrances go gangbusters over the last year, ploughing desperately needed money into the domestic economy and high street retail sector. Perfumes and Eau de Toilettes from the Beckhams, Beyonce and Kate Moss are huge. In fact we buy twice as much celebrity branded smelly stuff as UK consumers. Wowser.
The Government's medium term fiscal statement released last week was grim. Forecasts for economic growth tumbled. Next year growth in GDP is forecast to hit 1.5 per cent, down from the previous forecast of 2.2 per cent. That's quite a tumble. Forecasts for 2014 and 2015 have also been pulled back sharply. This means that government policies won't make a dent in the crippling unemployment figures and that we're going to be stuck in the austerity death spiral for a long time yet.
The austerity measures mean that people are repairing or buffing up tired looking shoes rather than splashing out on new boots. Latest figures from eBay.ie show sales of shoe polish up 11 per cent in the past month and sales of shoe trees up 17 per cent on last year.
The dreaded "double dip" recession has taken hold across Europe, with growth falling for the second quarter in a row. This is seriously worrying for our export sector which is dangerously skewed towards the Continent. Given that Europe is heading for a lost decade of sluggish growth, it'd make more sense to have our exports going to economies that at least demonstrate a heartbeart – places like India and China, or other emerging economies. Our trade surplus in September fell to €2bn – that's the lowest level since April 2011.
Sales of cappuccinos, lattes and other hot drinks at Bobby Kerr's Insomnia were up 5 per cent on the same week last year. This indicates a resilience in small discretionary spending and a rising addiction to caffeine. And muffins.
If you were trying to destabilise the retail sector, the best way to do it would be to undermine consumer confidence and increase uncertainty over future earnings and tax hikes. A bit like what the Government is doing with the budget. We'll have to rely on the Germans to tell us what is in store, as they are bound to have the draft text well before we hear about it next month. Despite this, sales of used cars appear strong, with volumes up 6.4 per cent last week on carsireland.ie
As an economic policy, sticking our head in the sand doesn't seem to be working... especially when it comes to mortgage arrears. There was a 7.2 per cent rise in mortgage arrears over 90 days from March to June. Apart from anxiety, the failure to address mortgage arrears holds back confidence and economic sentiment.
Collectively, we had €2bn less cash to spend last year as falling wages, rising prices and taxes kicked the legs from our disposable income. That represented a drop of 2.3 per cent on 2010. This is a massive amount of money to be removed from the economy, leading to business failure and tighter control on the purse strings.
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