DATA SHOWS CONSUMPTION CAUTION SPREADING RIGHT THROUGH THE DEMOGRAPHY
Only dramatic data become news. But it’s the lots of little signpost data points that keep me sane….that is, keep proving to me every day that the 3% obesity sector are wrong, we’re right – and half at least of the buggers are lying 100% of the time.
Here’s a few you may have missed. (Data points, not liars)
The Swiss make very good, very expensive watches for the upper end of the collaborating flunkey class. In Q4 last year, Swiss watch sales – with Christmas coming – collapsed. They haven’t done so on such a scale since….2009.
Apple make very good, very expensive Macs and Iphones for people who are reasonably well off in the young exec and retired sectors. They aren’t people who buy their clothes at Primark. The Apple CEO told the media this morning, “Right across the Bric world from Asia to Brazil and also in Europe, we saw Q4 sales softness the like of which we have never experienced before”. (According to IDC Research, global pc shipments fell a staggering 10.6% in the fourth quarter of 2015)
Investor withdrawals of the Shiny Stuff from the Shanghai gold exchange leapt by 38% in Q4, a sign that many Chinese (who culturally distrust all paper currencies) see something nasty lying ahead. Following last week’s new wobbles on the Composite, a huge surge took place last Thursday and Friday, continuing last Monday. 12 hours ago, the PBOC abruptly stopped issuing the data on withdrawals. The fear now is that Beijing may stop all withdrawals, or ration them. That fear caused gold imports from Hong Kong to leap by a whopping 67% during December. When the better off, savvy Chinese are buying all the gold they can find to the point of near-panic, it’s time to ignore the 3% balm….and instead ask yourself why gold trackers still show falling gold values. (Answers: 1. with a surging dollar, the US markets prefer it to gold. 2. The market trackers are bent)
Two things are now starting to happen. First, upmarket consumers are betraying doubts and caution. This means that awareness of impending disaster is diffusing down from the 1.5% liar space to the 20% collaboration sector. And second, the ‘mismatch/disconnect’ narrative – “the data do not support this wild market volatility” – is gradually being seen for the bollocks it is.
The bottom 40% falling behind in the wage stakes have been changing their consumption habits rapidly for a decade; the most obvious hole in the Camerlot ‘more people are secure under the Conservatives’ lie is the dramatic growth in discount supermarkets, and the hard times being suffered by both M&S and Tesco. Only Sainsbury has hit the right tone – ‘live well for less’ and their ads and pricing structures on quality goods paid dividends for them last year. Shoppers everywhere in the EU – and especially the UK – are buying the food they need, not the luxuries they desire. Big retail combines are in trouble, and sooner rather than later one of them will go under.
Who might they be?
Abercrombie & Fitch are on many analysts’ lists as a good bet for liquidation, but after an appalling 2014 they clawed back share last year, having lost out bigtime to the expansion of the Nike brand. But things are not good, with both Macy’s and Kohl’s badly down on the year: the US National Retail Federation was forecasting a 4.1% industry sales growth at the start of the year, but the word on the sidewalks is that the outcome was probably under 3%….and at lower margins. The shift away towards internet sales isn’t making things any easier.
Here in France, the supermarket giant Casino is being hit hard. Having personally spotted them closing some shops in my region, I did some digging and discovered they have a very heavy exposure in Brazil, where sales are down badly as the country begins to look more and more like a basket case.