Breakingviews

Post-Brexit UK consumers are oddly rational

August 18, 2016

Flagging confidence didn’t stop Britons from spending a month after their vote to leave the EU. Consumers may be blind to the recession threat. Or they may be anticipating that a slumping pound will push up the price of imported goods, and pre-empting higher inflation.

Tesco recovery starts with some gorilla tactics

January 14, 2016

The UK retailer’s sales have bounced back to growth. The reason is that Tesco is cutting costs sharply, shoring up its dominant market share. It’s an essential part of a retail turnaround, but doesn’t immediately help the bigger goal of generating cash to reduce its indebtedness.

When UK retailers fight, shareholders lose

January 13, 2016

Sainsbury, like rival Morrison, says sales are improving after years of declines. What’s really happening is that grocers scrabble for revenue at the expense of profit, while the whole market stays flat. The other signs investors care about are going in the wrong direction.

UK retail fails to weather the patently obvious

September 30, 2014

Clothes shop Next says Britain has had an unseasonably warm September. Who knew? Shares across the sector took fright at the ramifications for earnings. Investors may be venting other fears, maybe of a price war. Still, the reaction reveals a bizarrely inefficient market.

Tesco’s ambitions earthed by UK retail reality

January 13, 2012

Britain’s largest grocer disappointed with a 2.3 percent decline in like-for-like UK sales over Christmas. The lesson: it’s tough to grow profitably in a crowded market with depressed consumers. But while Tesco is clearly down, its model is not fundamentally flawed.

No wind in these sales

October 14, 2009

Families have levels of debt that remain stubbornly high and are still close to twice the peak of the 1980s boom. Yet consumers have returned to saving just 3 percent of disposable income. At such a snail's pace it will take roughly 9 years to bring household debt down to a more reasonable level of around 100 percent of disposable income.