When recovery is not enough

Article Abstract:

The United Kingdom consumer sector has been strengthned by rising real incomes, and the housing market is also strong. Sales volumes for non-food retailers have risen, but retail stocks do not appear to have benefited. Competition in the sector has increased, making price rises difficult, and floorspace has also increased. There is also concern that UK interest rates could rise, which would hit stocks. Consumer booms have meant more investment in stores and more competition in the past, so booms are not necessarily reasons to invest in retail stocks, though such stocks can help cut the risk levels of portfolios.

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UK consumer spending: retail shock

Article Abstract:

UK consumer spending may be strong in 1996, Lehman Brothers argues. Rising employment and real wages will push up income, and a rise in house prices is likely to mean that a lower proportion of income will be saved. Increased employment security and lower interest rates may boost confidence, so spending. Consumption could rise by some 4% in 1996 rather than 3% as forecast by the government. Retailers are likely to benefit, but there is also a greater risk of a rise in interest rates prior to an election.

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Miserable boom

Article Abstract:

Strong consumption in Britain may not benefit retailers, who are affected by competition and a large investment in retail space.

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