Late Night Shopping Boosts Economy: How?
The BBC reports (Tyne 7 October 2010) that late night shopping at Eldon Square (in Newcastle) will bring in an extra six and a half million visitors a year and boost the economy by an additional £246m a year. This strikes me as “Alice in Wonderland” thinking.
Six and a half million visitors leading to a boost of £246m – that’s a boost of about £40 per “visitor”. Where are all these forty pounds coming from?
- If they are coming from Scandinavians coming across on the ferries or cheap flights then it is new money and a genuine boost to the economy – but six and a half million visitors from Scandinavia per year amounts to an invasion not seen since Viking times.
- But if the “visitors” are from Tyneside and the surrounding area, I fail to see where these extra forty pounds are coming from.
- If they represent money spent in Eldon Square instead of in local shopping centres, it’s not a boost, at best it’s a redistribution at the expense of people’s local shops. And money spent in local shops is more likely to stay in the region than money spent in the national chains.
- If it is spending that would not happen otherwise, it represents an impoverishment of the region. Someone in the region has £40 less in their pocket, and the Eldon Square shops have £40 more. Roughly 80% of that £40 will then leave the region (as cost of the goods sold, profit to the store owners, and rents paid to the owners of Eldon Square*). And, if the goods sold are foreign-made, a significant portion of that 80% will then leave the country.
I totally fail to see how “retail” can “boost” the economy – other than by encouraging a Viking invasion. If six and a half million extra visitors each come for one day, that’s about 18,000 a day! Even if they are only there for two hours each, that’s a lot of Vikings in the malls.
* Eldon Square (together with the Metrocentre) is owned by Capital Shopping Centres a company with its Head Office in London but quoted on the London and Johannesburg stock exchanges.