I am not surprised by the news that Britain has slipped into a double-dip recession, solely from observing what is happening on the high street. In the high streets and shopping centres near where I live, more retail units are currently empty and they are remaining unoccupied for longer periods of time, compared to the immediate aftermath of the credit crunch and the first dip of the double-dip recession. Businesses go under in the best of times, but the economic climate seems really tough for retailers at the moment.
After the first wave of contraction and shops closing down, vacant units were taken up, sometimes by pound shops and charity shops, after a few months. Many former branches of Woolworths, it seemed, metamorphosized to branches of Poundland. There are no signs that this is about to take place, as retail units languish unused, week after week, and often month after month. The remaining retailers may be struggling as well, as many of them are offering merchandise on sale, more or less perpetually.
The economic picture looks pretty bleak: the economy is not growing, and indeed it is shrinking, but inflation is up. To make it worse, it is things like food and fuel that are becoming dearer, and that means there are less money to spend on luxuries and those nice extras that brighten our miserable existences. It remains to be seen how many people will be unemployed or underemployed as the economcy languishes, but the job market is unlikely to recover quickly or the wages to rise so markedly, so the total disposable income for non-essential products and services will be smaller.
There will always be a small number of rich people, and businesses that cater for those people will be immune. Those that pile ’em high and sell ’em cheap will be fine too. It is those in the middle who become squeezed, and the businesses that provide the little luxuries are likely to struggle. That has been my theory for some time, however, as to disprove this idea, none of the numerous coffee chains, prime candidates for people to cut back spending on, seems to be suffering from the recession yet: at least I have not seen coffee chains closing, instead there seems to be more of them around.