The British are a nation of shop keepers.....not for much longer.

[Mega]

The F.I.R.E is out!
http://www.telegraph.co.uk/finance/n...eet-shops.html

Mike

[oddlots]

Re: The British are a nation of shop keepers.....not for much longer.

It's funny you mention the british high street. One of the most disheartening things about contemporary Britain is the homogeneity of its high streets. It's the same 10 or so shops in every town. I always suspected that it was a product of the City. Anything that could be packaged and sold has been leveraged to death. The result: only companies that had the deep, leveraged pockets could afford the rates and only the deep, leveraged pockets could afford the real estate to let to these companies. Meanwhile, anything that was viable in real terms was bid-out of the market, bankrupted and no longer has the resources to start it all up again. Near future result: destroyed city centres. It's a good visual analogue to what the FIRE economy does: a blitz in slow motion.

[GRG55]

Re: The British are a nation of shop keepers.....not for much longer.

It's funny you mention the british high street. One of the most disheartening things about contemporary Britain is the homogeneity of its high streets. It's the same 10 or so shops in every town. I always suspected that it was a product of the City. Anything that could be packaged and sold has been leveraged to death. The result: only companies that had the deep, leveraged pockets could afford the rates and only the deep, leveraged pockets could afford the real estate to let to these companies. Meanwhile, anything that was viable in real terms was bid-out of the market, bankrupted and no longer has the resources to start it all up again. Near future result: destroyed city centres. It's a good visual analogue to what the FIRE economy does: a blitz in slow motion.

My impression of Britains High Streets a few years back was that every third storefront was an estate agent selling or letting property. I have not been outside of London for while, but I would expect there's been some casualties in that sector outside the capital.

Having braved the wall to wall Christmas shoppers this past Saturday at Fortnum and Mason and a few other shops on Picadilly, I can say without reservation that there is no evidence of a recession in Central London. None. I had a difficult time getting a hotel room on this trip. It is surreal...

[sunpearl71]

Re: The British are a nation of shop keepers.....not for much longer.

My impression of Britains High Streets a few years back was that every third storefront was an estate agent selling or letting property. I have not been outside of London for while, but I would expect there's been some casualties in that sector outside the capital.

That is correct. Outside London, even in active real estate markets like Cambridge, a number of estate agents have closed shop or been acquired by other local agents.

[renewable]

Re: The British are a nation of shop keepers.....not for much longer.

Having braved the wall to wall Christmas shoppers this past Saturday at Fortnum and Mason and a few other shops on Picadilly, I can say without reservation that there is no evidence of a recession in Central London. None. I had a difficult time getting a hotel room on this trip. It is surreal...

That is your evidence of a recession, in the UK at least. Londoners don't need hotels, and people from the UK usually do day trips. The UK authorities are attempting to avoid a crash in UK house prices through sterling devaluation, and have been quite successful so far. Result: cheap christmas shopping trips for foreign people - listen to the shoppers' accents/languages.

[GRG55]

Re: The British are a nation of shop keepers.....not for much longer.

That is your evidence of a recession, in the UK at least. Londoners don't need hotels, and people from the UK usually do day trips. The UK authorities are attempting to avoid a crash in UK house prices through sterling devaluation, and have been quite successful so far. Result: cheap christmas shopping trips for foreign people - listen to the shoppers' accents/languages.

For decades London has benefited from the influx of foreign money and foreign visitors, as well as HM's favourable tax rules [residency vs domicile] that allow wealthy foreigners to live there while avoiding much of a tax burden on their non-UK income [sort of a UK equivalent to being a low tax paying hedge fund manager or Warren Buffett in the USA :-)]. I suppose as a foreign visitor "shopper", I am a case in hand. I happened to be stuck there over the weekend, with business meetings scheduled on either side, so took advantage of the time to solve some of my Christmas gift difficulties, especially for my wife and UK-born mother-in-law, who have an affection for certain UK-made condiments and tea blends that are all but impossible to get in the colonies.

Despite the rise of the Canadian Dollar and the devaluation of Pound Sterling in recent years, I don't find London "cheap". Quite the contrary actually. My sense is the Pound is still a rather strong currency compared to the US Dollar, Euro, and most other global currencies...the depreciation against goods and services has been across the board in all currencies, making everything in London more expensive than it used to be. Hotels that are full don't discount. Neither do shops that are jammed shoulder-to-shoulder with buyers [I took the incredibly long line ups for the tills at F&M as an indication that somebody is buying all this stuff].

The influx of visitor shoppers doesn't explain one other observation. Every time I travel in Europe I am struck by the incredible number of young adults and young couples with infants and children in London, compared to the demographic I see in every other major western European city. Few of these appear to be visiting shoppers frankly. When I lived there half-decade ago a Sunday walk around the Serpentine resulted in eavesdropping in on an enormous variety of languages, a great number from eastern Europe. This past Sunday's experience was the same. I suspect one factor was the UK's more open labour mobility policies as eastern Europe nations joined the EU. The staff in the hotels, the restaurants and most of the shops I spoke with were mostly youngsters from all over Europe, quite a few of them studying in London. The French seem to prefer immigrants from former north African colonies and the Germans seem to prefer Turks, over eastern Europeans, for reasons I have never been able to fathom. To the degree one can be optimistic about future economic prospects for European nations, I think this demographic is a critically important element that could result in the UK [or at least London] outperforming continental western Europe in the years to come.

The weekend FT had an article stating that Central London home prices are rising, while they are falling everywhere else in the UK. Prices for homes valued above GBP 1 million are rising measurably faster than the market average, and prices for homes priced over GBP 5 million are rising fastest of all. Perhaps that's an indication that foreign money is seeking a tangible "safe haven", something more secure than a European sovereign bond or in an account in a Russian or Middle East bank? And also an indication that the rich will continue to get richer?

Or perhaps it means that EJ's housing bust sequence, which starts at the periphery and works inward toward the core, hasn't quite reached the center of London yet?

[LorenS]

Re: The British are a nation of shop keepers.....not for much longer.

Great Britain has outlawed nearly everything I like to buy, except for maybe ale, and I like Guiness better than anything British.

[astonas]

Re: The British are a nation of shop keepers.....not for much longer.

Or perhaps it means that EJ's housing bust sequence, which starts at the periphery and works inward toward the core, hasn't quite reached the center of London yet?

I'm glad you brought this up. I was wondering about this myself. It does seem to me that major cities are still holding on, but I was wondering: "how much longer?" I don't recall a recent update.

[renewable]

Re: The British are a nation of shop keepers.....not for much longer.

The weekend FT had an article stating that Central London home prices are rising, while they are falling everywhere else in the UK. Prices for homes valued above GBP 1 million are rising measurably faster than the market average, and prices for homes priced over GBP 5 million are rising fastest of all. Perhaps that's an indication that foreign money is seeking a tangible "safe haven", something more secure than a European sovereign bond or in an account in a Russian or Middle East bank? And also an indication that the rich will continue to get richer?

Or perhaps it means that EJ's housing bust sequence, which starts at the periphery and works inward toward the core, hasn't quite reached the center of London yet?

Good post. You are right, it is not just explained by foreign Christmas shoppers. There is plenty of evidence that people outside the UK see the UK / London as a safe haven, partly because the UK welcomes people from outside (as you say, including the non-dom tax regime where original UK residents are taxed more than wealthy foreign people, who under the rules are not taxed on foreign income). As the rest of the world gets wealthier, and the UK relatively poorer, it's become harder for original residents to buy homes in the capital. Telegraph: More than 50pc of large London properties bought by foreigners - maybe the queues in Fortnum's are Savills estate agents spending their bonuses!