A Christmas boom in London; false dawn or signs of recovery?

I was in London last Thursday and at 6pm could not even get into Bond Street tube station. Kettners restaurant earlier in the week, both the public area and (from what I could see), the private rooms, was heaving.  (Good food but the most charming yet erratic service I've experienced for a long time!)

Then the Evening Standard published a feature about Christmas parties; which are back in a big way this year apparently.

"One party for 500 in December will have a Twenties theme with a fountain spurting gallons of pure gin while scantily clad waitresses serve gin jellies and molecular cocktails...

Meanwhile sales of Fortnum's top of the range £5,000 Imperial hamper, complete with a half-bottle of 1990 Chateau d'Yquem and a 450g tin of Goose Foie Gras with Truffle, have already beaten all previous years.

At the five-star May Fair hotel, new general manager Anthony Lee is putting the finishing touches to a new bar specialising exclusively in magnums of vintage Dom Perignon.....  As Mr Lee says:”I had a guy who came in off the street the other week and asked if we could take care of 80 guests of his with Dom Perignon. I won't say exactly how many, but they got through an incredible number of bottles of high end champagne — and that is before the bonus season kicks in.”

What's going on?

I don't pretend to know. We seem to be in two parallel universes, one where people have more money than ever and are willing to spend it.  The auction price of first growth claret has doubled this year.  Yet, at the same time, Ireland sinks into the mire, facing years of hardship, and the UK public finances are bad enough apparently to force cuts in the small mobility allowance paid to disabled people in residential homes.   And in many other countries real wages are declining and public services are being cut.

From a business point of view, and being in a somewhat pessimistic frame of mind, I guess there are two major 'trends' I would be considering in my risk analysis for 2011.  The first is social unrest; I just struggle to see that European populations (and particularly some of the hardest hit groups), are going to meekly accept declining living standards while they still see too many others, ranging from the bankers to the Eurocrats in Brussels, living a life of ease.

The second is inflation.  There seem to be a number of factors which could drive this; the temptation for Governments to accept a 'moderate' level in order to reduce debt in real terms; the international competition to reduce the strength of ones own currency; inherent demand increases in commodity markets; VAT and train fare increases (in the UK and elsewhere); and that's before we even get onto quantitative easing.

All this sounds a little gloomy, and of course I may be totally wrong.  But when we look in more detail next month at the prospects for procurement in 2011, we will certainly frame that discussion in terms of these wider social and economic issues.

Discuss this:

Your email address will not be published. Required fields are marked *