Editor¬ís view: Expanding retailers will give consumer confidence a boost
We may not be out of the recessionary woods yet, but major retailers are illustrating their confidence in an eventual upturn by making some major investments in expansion. By Matthew Valentine, EditorSainsbury's bid to capitalise on falling property prices and lower refurbishment costs, by raising £445 on the stock market to fund growth, shows not on ly a company keen to find a good deal but one that is playing a long term game. Sainsbury's knows that the right expansion decisions made now could still be paying dividends in years to come.
The move could also be a sign not of green shoots, but of returning confidence. As consumers we like to think we are rational, but the truth is that we are all swayed to some extent by emotion and mood. John Maynard Keynes famously said that the market can remain irrational longer than most people can remain solvent, and time has shown the statement to be depressingly accurate.
Amid headlines of doom and gloom, on high streets littered with empty stores, it is easy to spiral into a melancholy pattern in which we all avoid spending in case things get worse. The result is obvious.
So when one of the country's biggest retailers states publicly that it intends to spend millions on buying and improving stores, it provides a shot in the arm for consumer confidence. And anything that works towards getting shoppers spending again has to be good news.
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