All is not well on Britain’s high streets.
Bellwether Next last week lowered its sales forecasts for the second time this year and warned that this might not just be down to recent cold weather — there could be a broader consumer slowdown going on, too.
Store chains BHS and Austin Reed have gone into administration.
However, the picture of the consumer is puzzling. It appears Britons are snapping up Rolexes and Range Rovers, but are shopping at discount supermarkets and are prepared to wear last year’s fashions. That is a problem for store groups and investors alike. Turning traditional spending patterns on their head makes it harder to judge where the British consumer’s headed next.
Britons have regained spending power over the past year or so as wage growth picked up and inflation cooled.
However, spending has not been spread evenly. Though demand for Swiss watches has slumped in Hong Kong and China, the British can not get enough of them. Swiss watch exports to the UK were up 25.8 percent in December last year. Overseas travelers might be playing a part, but one jewelry retailer said Rolex sales have gone through the roof both in and out of London.
Luxury cars are another recent favorite. A 2 percent increase in registrations across all manufacturers last month belies a 19.8 jump in registrations of new Mercedes and a doubling of Jaguar sales.
Yet, Britons are happy to scrimp in other ways. They have flocked to the German no-frills supermarkets Aldi and Lidl over the past few years. Although their sales growth has started to slow — perhaps the result of the traditional supermarkets engaging in a vicious price war — a raft of new stores suggests they are still continuing to win customers.
Another area where Britons seem more careful is clothing. UK high streets suffered their sharpest drop in sales since the depths of the 2008-2009 financial crisis, according to BDO, which tracks the sales of medium-sized retailers, with a combined 10,000 stores. Fashion sales last month dropped 9.2 percent, the biggest decline since February 2009.
However, the larger point is that consumer-facing businesses have had a good run. From EasyJet to Costa Coffee-owner Whitbread PLC, companies have benefited from the economic recovery and stronger spending power.
The question now is whether even the stronger parts of the consumer economy might be coming off the boil — new car registrations cooled last month, as did Swiss watch imports in March. It should become clearer once the referendum on EU membership has passed.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies. However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday. “Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS