Posted on Leave a comment

Brexit viewed purely in economic term

The EU has certainly brought benefits to the UK. However, these benefits have come at a cost and this cost has been distributed unevenly across the UK. By cost, I don’t mean the annual contribution that we make but more the hidden costs associated with membership. In joining we have had to accept the demise of industries once at the core of UK life (fishing is an example) as well as turn our backs on countries outside the UK with which we have had historical trading ties (typically through the Commonwealth).

Image: istock

In addition, the introduction of the free labour movement has seen not only the useful movement of skilled labour into areas where it is needed but also the flooding of the semi-skilled and unskilled markets with cheap labour. Bringing costs down is not a bad thing, but there are inevitably social consequences when it is achieved by reducing labour costs rather than improved processes.

In communities dependent on supplying labour into these latter markets, jobs have either become scarcer (supply of labour outstripping demand) or it has resulted in a depression in the wages paid to people as employers have a bigger potential workforce from which to draw (and the appearance of zero-hour contracts). In addition, these communities have found themselves inundated with migrant labour which has not only put pressure on existing infrastructure (hospitals, schools, etc) but has also alienated some people who feel like strangers in their own communities.

Migration in these areas has been more akin to an invasion rather than a steady integration. So, in short, the hidden costs of the EU have been distributed unevenly throughout the country. Add to this the pressure of austerity measures introduced following a recession caused entirely by the greed of unscrupulous financiers and you have the potential for large swathes of the population feeling ignored and disenfranchised.

Now throw into this mix the idea that the population of the UK will be given a vote on whether to stay in or leave the EU. What do you think is likely to happen? Well, just what did happen. Those areas of the country feeling the greatest pain have voted to leave. Those areas of the country suitably blanketed from the hidden costs have voted to stay.

To steal from Stevie Smith, Remainers are waving the leavers are drowning. So what does this all mean? It means that we all have to re-assess the real benefits/costs of belonging to the EU. We certainly need to address the issue of free movement and we certainly need to revisit the revival of industries that traditionally lie at the heart of the UK.

If this means leaving the EU, then the short economic term pain will be worth it if the long term social benefit is to bring the disparity parts of the UK closer together again.

BTW, did you notice that I made no mention of the MPs or anyone involved in the political process?

Why? Because vested interest and party politics are driving their agendas. What I am citing here is what the people of this country need – not the politicians.

Sources – Nemo’s comment

Posted on Leave a comment

Retail sales for the four week period covering 29 July 2018 to 25 August 2018.

The ONS has reported on retail sales for the four week period covering 29 July 2018 to 25 August 2018.

  • In August 2018, the quantity bought increased by 0.3% when compared with the previous month, with increases across all sectors except food, clothing, and petrol.
  • The month-on-month growth rate in the quantity bought in food stores at negative 0.6% and clothing stores at negative 1.9% was offset by strong growth in other non-food stores at 2.8% and household goods stores at 4.5%.
  • In the three months to August, the quantity bought increased by 2% when compared with the previous three months, with continued growth across all sectors.
  • The last three months of summer from June to August 2018 saw an increase in the quantity bought at 3.4%, with food and household goods stores doing well in the warm weather when compared with the previous summer, while non-store retailing continued to show strong growth.
  • Spending online continued to increase to reach a new record proportion of all retailing at 18.2%; with strong growth in department stores also reaching a record proportion at 18.4%.

Commenting on today’s retail sales figures, Office for National Statistics senior statistician, Rhian Murphy said:

“Retail sales remained strong in the three months to August, with continued growth across all sectors. Food and household goods stores particularly benefitted from the warm weather when compared with last summer.

“The figures for the month of August were a little more mixed, with food sales falling after strong sales earlier in the summer and clothing sales declining following a strong July, as suggested by clothing retailers. On the other hand, household goods grew strongly.”


Posted on Leave a comment

High street spending dips in the UK after two months of expansion

The rise in hotels and restaurants is more than offset by falls elsewhere, says Visa

Spending in the shops fell in July according to Visa, in another blow for Britain’s struggling high streets.

The credit card company, which accounts for £1 in every £3 spent in the UK, said that despite hopes that the heatwave could lift retailers, spending was down 0.9% in July compared with the same month a year ago.

The steepest fall was in “face to face” spending in retail outlets, which fell by 1.2%, but even spending online dropped 0.5%.

The figures are likely to reignite concern about the financial health of British households, where wage growth is running at only a fraction above inflation. Last month, ONS data revealed debt levels were worse than at any time on record, with households spending about £900 more than they received in income during 2017.

The gap between inflation and earnings could narrow completely when inflation figures are published on Wednesday. These are expected to show consumer price inflation ticking up from 2.4% to 2.5%, matching the current 2.5% growth in wages and effectively meaning real incomes are flatlining.

Visa said that while warmer weather boosted spending on food, drink, restaurants, and hotels, it was more than offset by a marked fall in spending on transport and household goods.

Mark Antipof, the chief commercial officer at Visa, said: “Retailers had a difficult time in early 2018, and while there was some respite in May and June, July’s fall in spending is concerning, particularly as we look ahead when the impact of the interest rate rise and back-to-school costs will likely put further pressure on Britons’ wallets.”

The figures may suggest that the relatively robust GDP growth of 0.4% in the second quarter of 2018 could be short-lived.

Visa said its spending index correctly pointed to the slowdown in UK economic growth in the first part of 2018 when GDP growth slipped back to 0.2%.

“The July figures pointed to a disappointing start to the third quarter,” the company said. “On an annual basis, total expenditure fell 0.9% in July, thereby ending a two-month sequence of expansion.”

Separate figures from LSL Property Services and Acadata reveal that house prices recorded their fifth successive month of declines in July.

It said average prices fell 0.2% during the month to £302,251, taking the annual rate of house price growth to 1.6%. Prices fell across all parts of London and the south, as well as the east of England. It added that transactions were 6% below the seasonal trend.

The figures are in contrast to Halifax, which recorded a surprise rise in prices in July. LSL said its index included cash purchases of property as well as the mortgage data recorded by the major lenders.

A survey released by Nottingham Building Society found that the recent raft of bank branch closures is hastening the loss of local shops on the high street.

It found that 46% of shop owners blame the loss of a local bank branch in the last three years for negatively impacting their business, while 24% said it contributed to them going out of business within the last five years.

Small business owners are suffering as a result of lower footfall, with 36% of consumers saying they would make fewer visits to their town or village once their local bank branch closed.

About 40% said they would make at least three fewer visits a month as a result. Shop owners in areas affected by branch closures estimate that their annual revenue dropped by an average of 20% after the bank shut its doors.


Posted on Leave a comment

Household debt in UK ‘worse than at any time on record’

British household finances among most indebted in major western countries, ONS says

British households spent around £900 more on average than they received in income during 2017, pushing their finances into deficit for the first time since the credit boom of the 1980s.

The Office for National Statistics said the shortfall amounted to nearly £25bn – equal to almost a quarter of the NHS budget – and the overspend was mostly paid for with borrowed money, though households also ran down savings.

The figures pose a challenge to the government, which was warned last year that Britain’s consumer credit bubble of more than £200bn was unsustainable. A dramatic rise in debt-fuelled spending since 2016 has also taken place against the backdrop of the Brexit vote, which triggered a rise in inflation at a time of weak wage growth.

Analysts warned that a squeeze on household incomes from benefit cuts, lackluster wages, and high inflation would continue to force poorer households to borrow more to pay basic bills.

Tom Selby, a research analyst at financial adviser AJ Bell, said the figures presented ministers with a significant challenge as they sought “to build financial resilience in the UK”.

Researchers at the ONS said the situation was worse than at any time on record after the £25bn deficit last year surpassed the £300m deficit recorded in 1988. British household finances also slumped from being among the most solvent in the 1990s to being among the most indebted compared with households in other major western countries.

The report – titled “Making ends meet: are households living beyond their means?” – found that the deficit among UK households, equivalent to 1.2% of GDP, contrasted with a surplus in France equivalent to 2.7% of GDP and a surplus equivalent to 5.1% in Germany.

Last year official data showed unsecured credit – such as credit cards and payday loans – climbed to a record high of more than £205bn while the consultancy PwC said its own measure showed consumer debts rising above £300bn.

The ONS said households took out nearly £80bn in loans in 2017, the most in a decade. But they deposited just £37bn with UK banks, the least since 2011. Households accumulated more debt than they acquired in assets even when their investments in bonds, shares, and pensions were included.

Anti-poverty charities warned that millions of low-income households were the worst affected.

StepChange, which provides advice for indebted households, said the poorest were in constant need of credit to keep their heads above water.

The charity’s chief executive, Phil Andrew, criticised the ONS for saying that households were living beyond their means, which he said implied they could cut back if they wanted to.

“It’s really unfortunate that this very useful data is so heavily sprinkled with the phrase that households are ‘living beyond their means’. The reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try.”

He added: “Not having enough money to make ends meet is not the same thing as living beyond your means – which implies you have a choice when too many people do not.”

According to ONS figures, the poorest 10% of households spent two and a half times their disposable income, on average, in the financial year ending 2017 – while the richest 10% spent less than half of their available income during the same period.

The ONS said a rise in interest rates, expected to be pushed through by the Bank of England next week, could encourage greater saving and an improvement in household finances.

But AJ Bell’s Selby said: “For people having to borrow to make ends meet, saving for the future might feel like a luxury they simply cannot afford.”


Posted on Leave a comment

4 Reasons for visibility within a supply chain system

Visibility encompasses not only sensing data but also how to analyse it and take appropriate action across a supply chain system. A supply chain system allows collaboration and communication between internal and external trading partners and should give visibility to activities up and down the supply chain. Significant benefits are gained from this end-to-end visibility, such as higher order fulfillment rates, improved customer service levels, increased operational efficiency, higher profitability, and revenue growth.

Order Fulfillment Rates

Order fulfillment rate is the percentage of customer or consumption orders satisfied from stock at hand. It is a measure of an inventory’s ability to meet demand. Also called demand satisfaction rate. The best solution to gaining visibility may be to invest in cloud technology capable of managing big data. This facilitates communication and the ability to make quick, informed decisions. Bearing in mind that order management and fulfillment has long been considered one of the core competencies of the supply chain—and business—success.

Customers Service Levels

Meeting the needs and demands of customers is by far the biggest challenges facing today’s supply chain professionals. Not only do customers expect to receive their products in a timely manner, they also want choices of when it comes to when (and how) those products are delivered. Visibility allows for business to respond as quickly as possible, know customers, fix mistakes, go the extra mile, think long term – A customer is for life. Customer Service Level has an impact on both existing customers and potential customers. A recent survey found that 68% of consumers would react by telling family and friends about a bad experience by posting it on a social network. And as each Facebook profile has an average of 229 friends, the reach of this experience can quickly reach thousands.

Operational Efficiency

One of the ways companies measure efficiency is with order fulfillment processes by looking at the Perfect Order Metric. A perfect order is one that is on time, complete, and undamaged, along with the correct paperwork to accompany it. This metric is similar to the fill rate. To determine the fill rate, divide the amount of work or product a supplier has provided by the total amount of work or product necessary. Imagine that a customer requests 60 cases of product from a business and the business has shipped 20 cases. The fill rate is 20 divided by 60, or 33.3 percent. Visibility of operational efficiency allows for continuous process improvement.

Profitability and Revenue Growth

As organizations look to increase revenues by expanding their product portfolios, they’re also introducing complexity and risk into their supply chains.  A 2017 global survey by supply chain consulting firm Geodis found that visibility has become a bigger concern among companies in recent years. In the report, 70% of respondents described their supply chain as “very” or “extremely” complex. Only 6% of those who participated in the study were confident that they have full visibility of their supply chain.  This has been attributed by the peerless research group study to the lack of necessary systems to handle the visibility (transparency).

Visibility enables the business to increase profitability by reducing cost and risk within the supply chain system. Achieving an increase in the business surplus which creates value within the supply chain simultaneously impacting revenue growth. As a supply chain management professional you are expected to leverage these benefits to facilitate business sustainability and competitiveness.