IT WAS an unusually busy news day on the financial markets yesterday.
Now that the US Government debt crisis appears to have been resolved for the time being, it’s time to return our attention to what’s happening in the wider global economy. Investors and traders were hit by a glut of official facts and figures from the US and elsewhere that have given cause for some considerable anxiety.
American consumer spending was down 0.2%, according to figures published yesterday. It’s the first drop in two years, and comes on top of GDP data that shows that growth in the US economy is every bit as sluggish as Britain’s.
There were other concerns around yesterday, too, including Italy’s public finance crisis, but perhaps the most concerning of all was news that Brazil’s economy is slowing.
Industrial production in Brazil fell more than expected in June from May, the latest sign that Latin America’s largest economy is slowing from blockbuster growth last year, even as inflationary pressures still weigh.
Brazilian industrial production dropped 1.6% in June, according to government figures yesterday. That was far worse than analysts had been expecting.
The figures have sparked a big debate in Brazil about how quickly the economy is slowing down, giving weight to a more pessimistic view of growth.
To this point in time, Brazil has been one of the bulwarks against global downturn. Its economy, the largest in Latin America, is seen as one of the world’s most prominent emerging markets. In particular, its minerals have been used to stoke China’s huge growth. It had been hoped that Brazil, and countries like it, would help pull the rest of us out of the economic doldrums.
Any slowdown in Brazil must be a worry for everyone else. It serves to demonstrate that it is possible to be distracted too much by issues affecting developed Western economies when, in fact, other regions of the world are becoming increasingly important to us too.
THE move by Speke- based wholesaler Benross to acquire both the TJ Hughes and Lewis’s names is interesting.
Benross is a long-established Liverpool business that once traded from a warehouse just behind TJ Hughes’s London Road store. It has now taken ownership of that store and intends to revive its fortunes, along with three others in Eastbourne, Glasgow and Sheffield.
Benross will also use the Lewis’s name at a site it has already acquired in Bury, and it hopes to find suitable premises in Liverpool and elsewhere shortly.
This is a brave and very enterprising move.
Both TJ Hughes and Lewis’s brands have struggled to attract customers and trade successfully in recent years. Whether the Juneja family are able to succeed where others have failed remains to be seen, but you have to give them credit for their faith in these traditional brands.
Certainly, there are plenty of examples of discount retailers that are thriving. I anticipate that both brands will need to be treated carefully and realism shown about where they can trade successfully. TJ’s problems were probably associated with an over-ambitious expansion plan that saw the group open stores in parts of the country where it was previously unknown. While these brands may well trade successfully on their home turf, I am not sure they will travel well – but we wish them all the best.