Sign Of The Times...Well What Did You Expect.

Some of my blog postings in the past 18 months commented that a slowdown in the housing market was on the cards, giving a knock-on effect on consumer spending in certain areas online mainly retail. In fact we thought it should have all come to a head in Q4 2005 but the market pushed back and as a result will have a bigger effect on the current 'crash'.

InternetRetailer.com's survey released stats which showed that just over 35% of online retailers surveyed "anticipate sales will grow by at least 30% over last year" with "only 17.4% of online retailers plan on scaling back their businesses this year." Nearly 31% of online retailers surveyed will work to save on general and administrative expenses, 21.8% plan to spend less on advertising and marketing and 21.8% will reduce fulfillment expenditures. Less than 11% plan to cut back on technology.

With rising food prices and increases in oil/fuel bills with no signs of increases in wages are retailers actually being quite bullish and really in for a crash in online sales. The impact of the credit crunch on brits has now hit home but where and what will they buy online?

Shoppers are looking for cheaper choices for food and clothing so in theory could drive people online to shop for more bargains. The simple fact is the next 3 years at least will be a rough road for retailers especially if houseprices do fall in excess of 35% placing most in negative equity.

Having worked for M&S for a few years I have great respect for their CEO Stuart Rose who has been upfront that a slowdown in the market was invevitable. M&S are now seeing the repercussions by seeing a 5.3% decline in sales over the past 3 months. Over the coming months this will be a story on most mainstream retailers.

Industrys to benefit in this market could be the gambling sector, where people get desperate and gambling their pennies to try and make pounds!