Shopping is called retail therapy for a reason. Photo / Thinkstock
The Shopping Channel did its very best to make light of the austere retailing environment of the past few years. Desperate Housewives star Eva Longoria was paid $120,000 to fly in to launch the enterprise in early October. Glitz and glamour, not grim reality, were the order of the day.
The actress' endorsement, said the channel, set the benchmark for where it aspired to be. So much for aspirations. As it was for retailing this year, so it was for the Shopping Channel.
But it is not in the nature of humans to be tied to austerity forever. We all like to have bright new things in our lives. Could it just be, therefore, that 2013 will be the year when we break the shackles and start dipping into our wallets again? The 13 per cent surge in Boxing Day spending, as recorded by Paymark, suggested it might. So, too, did a survey by Westpac McDermott just before Christmas, which reported that consumer confidence was bouncing back.
That indicated New Zealanders are starting to have faith in the economy and what is most likely to occur in the immediate future. If so, they are ready to spend with confidence. And it will not just be retailers cheering the end of a long period of struggle. We will all get a boost. Shopping is called retail therapy for a reason. A surge in spending will cheer us all up. Indeed, the morale of the nation will be much improved.
The Government will be among those very happy to see people spending up. Consumer spending generates added production and new economic activity, tackling the vexed issue of unemployment in the process. It also increases the Government's GST take, no small matter given this accounts for more than a quarter of its tax revenue.
Not that the Government is about to start telling people to reach into their pockets to stimulate the economy. It was, after all, excessive consumer spending that got us where we are today. Some people bought homes they could not afford. Others spent money on credit cards and racked up so much debt that they have struggled to meet their debt obligations.
