‘The retail sector can’t rely on Keir to deliver a dose of Christmas cheer’

Christmas is fast approaching. Festive foods are starting to line the shelves, gift areas are springing up in store and cards are on display. The only thing that looks as if it may be in short supply is seasonal joy.

As the new government struggles to find its feet and set a course for the bright sunlit uplands, the consumer mood is far from celebratory.

Just a few months back, as Sir Keir Starmer and Labour swept to power, it could not have been more different. There was a mood of optimism as hopes grew that after years of turmoil, stability and a brighter future were in prospect.

So far though the mood is one of bemusement and some trepidation. Having thirsted for power, Labour seems not quite sure what to do with it – or certainly unable to articulate its ambitions, instead casting a pall of Stygian gloom over the nation.

“Having thirsted for power, Labour seems not quite sure what to do with it – or certainly unable to articulate its ambitions, instead casting a pall of Stygian gloom over the nation”

It’s fair enough that Starmer and his ministers are honestly realistic about the challenges the nation faces. Any chief executive that’s ever led a turnaround – and there are plenty in retail – know that realism and openness about what’s ahead are a core element. They also know that they need to point out a destination worth the hard yards.

It’s the last part that’s missing at present, and its absence is spooking consumers. Despite its protestations to the contrary, the new government is coming across like an austerity administration as policies such as cutting pensioners’ fuel allowance make headlines and chancellor Rachel Reeves does a passable impression of Charon, the funereal ferryman of Greek myth who transported the souls of the dead to the underworld.

Retailers may agree or disagree with the policies being adopted by the government, but they will also be unnerved by the jarring effect on their customers during the all-important golden quarter.

Just before the election, the chief executive of one big retailer told me: “I think the election will be a game-changer. It will show a country that wants a different future. It’s a big change that should bring a sense of being together.”

He believed that augured well, particularly as lower inflation also eased the pressure weighing down shoppers’ spending power and sentiment. But the reverse seems to be the case right now.

The latest GfK consumer confidence data showed a reversal of attitudes as people fretted over how their finances may be hit by the Budget at the end of October – Starmer has signalled the likelihood that it will be “painful”.

There may well be an element of kitchen-sinking, again familiar to retail leaders during turnarounds. There is hope that having laid the gloom and doom on so thick, the actual outcome may prompt sighs of relief among consumers if it’s not as bad as feared.

Despite all the angst, things are getting better for consumers. Asda’s latest income tracker showed that disposable income increased by 12% year on year in August

“Despite all the angst, things are getting better for consumers. Asda’s latest income tracker showed that disposable income increased by 12% year on year in August – a welcome increase, and the fifth month in a row of double-digit growth”

After taxes and essential spending, the average UK household had disposable income of £247 per week last month, “surpassing the pre-cost-of-living-crisis peak of £246 per week achieved in March 2021”.

The extent to which any of that cash will find its way into retailers’ tills this golden quarter is still uncertain although people will be determined to celebrate at Christmas as much as they can. They always do.

The PM told the conference: “We do need joy, we do need that in our lives.” But retail can’t rely on any help from Keir in spreading Christmas cheer.

If the halls are to be decked with holly it will be up to retailers to unleash the seasonal spirit by providing value for money and enticing product. It may not be easy, but they’re well used to that.