The drastic effect austerity measures are beginning to have on homeowners across the UK has been aptly demonstrated this week by the collapse of several High Street chains. Households all over the country are now looking more closely at their spending power and looking for bargains such as two for one offers in the supermarket, buy one get one free offers in markets and cheap home insurance when it comes to home security.
A catalogue of big names
The shops that have gone into administration this week include Jane Norman, a fashion outlet at the higher end of the price scale, TJ Hughes a High Street Department Store chain, Moben the high end kitchen retailer and iconic store Habitat, who announced that 30 of their 33 shops would be placed in administration with only the London stores surviving. Two other major names in the retail trade, Carpetright and chocolate manufacturers Thorntons have announced that many of their stores will be closed in a bid to see out the downturn.
Middle England suffering
It is no coincidence that many of the retailers in trouble feature at the high end of the market. For many years economists have said people always look to cut out luxuries first when they find their budgets are being stretched, the truth in this observation is hitting home with a vengeance at the moment. Of course this is qualified by the fact that it is Middle England that is feeling the pinch and not the super rich. Merchants selling goods at the very top end of the market will probably escape the clutches of a recession as their customers are well protected from all but the very worst of bad times.
Nervous times for all as the cuts hit home
It is 15 months since the Coalition came to power with promises of austerity measures the likes we have not seen for many years. For the first 12 months of their Parliament it seemed as though only the housing market and public service jobs would suffer. NHS managers were told they would be losing their jobs and the stagnation in the housing market meant very few home insurance salesmen were taking home big bonuses, but it seemed a bit of a phoney war. It is phoney no longer. The strike by public sector workers on Thursday will be worrying a Government that is looking nervously over its shoulder at what is happening in Greece and economic commentators are openly questioning if the Coalition were right to insist on such heavy cut backs. The next six months will be vital in determining if George Osborne got it right.