Giving credit to retailing

What role can retailing play in the recovery of the world’s leading economies? Its a question that many retailers have been asking lately. The trouble is, not many Governments or commentators seem to give retailing the credit or the support in fully deserves. In fact, there are even some commentators who somehow feel that the high levels of unsupported consumer spending was the retail industry’s fault.
I was struck over the last few days by a number of developments that seemed to underline this attitude. Firstly, the Editor of the UK’s Retail Week magazine, Tim Danaher described in his blog last Thursday February 5th, a meeting that he hosted of senior retailers and a Government Minister. The retailers’ mood was angry, arguing that the Government was showing little concern about the plight of retail businesses in this recession. One retailer, now in Administration, relayed the tale of how they had spoken to key Government figures to seek financial support of relatively small levels to tide it over, but the fact that the business wasn’t in manufacturing sealed its fate.
The Minister went away promising to relay those feelings to other Ministers. Lets hope he does.
It was also interesting to receive a press release from the National Retail Federation in American commenting on President Obama’s economic rescue package. The NRF argued that what was really needed were sales tax holidays - not the meagre percentage point reductions seen in the UK, but literally removing sales tax for short periods to get people excited about price reductions and spending again. Given the NRF’s acknowledged lobbying effectiveness, US retailers will be hoping that their voice is being listened to by the new administration.
And then the even more surprising piece of news was contained in an exclusive interview that the Chinese Prime Minister gave to the Financial Times last week. In the detailed interview where he talked about what the Chinese Government was doing to alleviate the economic crisis he made the comment that it was vital that they stimulate consumer spending and acknowledged its importance to the economy. A remarkable comment from a theoretically communist government, but even more encouraging to hear a major power - arguably the second most important economic power in the world - recognise that we can encourage manufacturing to produce goods, but we also need strong and dynamic retail sectors to sell them on to consumers.


http://blog.emap.com/retailvoice/