The credit crunch Grinch that has been stalking the financial markets of late could have a variety of consequences on Christmas this year. They are effecting different groups in different ways, including some unexpected benefits, but while the benefits are short term the rest of the consequences are long term and will linger long after Santa’s visit.

The first benefit is that fears over the credit crunch have led to consumers beginning their Christmas shopping later than usual. Retailers, fearing a disastrous end to the year, have responded with many deals and savings that would otherwise wait until January. ‘A survey by the Confederation of British Industry on Wednesday showed retail sales growth in the first half this month slowed to its weakest in more than a year and stores were their most pessimistic since April 2006 about sales next month.’

‘Furniture and household goods retailers, such as Carpetright , have been the first to take a hit from a rapidly cooling housing market. Clothing stores, like Next and Debenhams have also suffered as the rising cost of borrowing has eaten into peoples’ disposable incomes. But analysts reckon the timing of Christmas this year, it falls next Tuesday giving people a whole weekend to cram in any last-minute shopping, should help ensure the festive season isn’t a wash-out for stores.’

‘Not all retailers are suffering: department store chain John Lewis has boasted healthy year-on-year sales growth every week this month, while supermarkets have cashed in by selling homewares, clothing and electrical goods alongside food.’

This mixed bag is pretty much as good as it gets. And this good news for consumers is, however, very bad news for employers which means problems are beginning to store themselves up for next year. ‘The big question for policymakers and retailers is what happens after the Christmas decorations have come down and the bills start to pile up on peoples’ doormats?’

This entry was posted on Wednesday, December 19th, 2007 at 4:39 pm and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.