Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

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.

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