Post-budget blues, blacks and reds

The budget was a clever rejuggling of limited resources, with an emphasis on future growth, investment and capability that I hope will be enriched in the future, rather than squandered in U-turns and electioneering.

As expected, there wasn’t a whole lot of jam today, for the retail sector or anyone else, though the reduction in fuel duty may ease the overall pain of a shopping trip.  It was certainly the first time that I’ve heard a chancellor introducing a measure to support “our high street music stores”, when the intention to close the Channel Islands VAT loophole was announced; however, the purpose of this measure is to raise more VAT, so it will impact HMV’s online offer quite as much as Tesco’s or anyone else’s.  I suspect that the net effect will be to make supermarket CDs and DVDs look that much cheaper.

Retail results today are all over the shop, with Simon Wolfson acknowledging that “retailers cannot plan for never‐ending growth in like-for-like sales that many have enjoyed over the last 15 years”.  Next’s full-year profits were up 9%, but Wolfson is nothing if not prudent, and as close to the corridors of power as any retailer.  As a Tory peer, when he says that “the consumer environment is likely to be dominated by the challenges of global inflation, public sector cuts and limited growth in consumer credit”, you can assume that George Osborne’s team probably sees things in a similar light.

Meanwhile, Kingfisher full-year UK profits are up 12% on flat sales, an impressive performance from the “Delivering Value” programme; Ted Baker – now a global brand – lifted full-year profits by 24%; and at Clinton Cards, first half like-for-like sales fell by 2.7%, but profits were down 65%.  It can be a knife-edge existence out there.