Why the Conservative win is good news for retailers
It's immediately clear that one of the main reasons the Conservatives won a majority is because they were seen to be on the side of business. Labour were perceived to be 'anti-business', as were the SNP. Lord Sugar has just resigned from the Labour Party for just this reason.
The Conservatives entire analysis of the economy is predicated on a thriving private sector. What's good for the private sector is good for Britain. The Conservatives have consistently maintained that they are able to cut jobs in the public sector because the private sector will more than make up the loss. The Conservatives are absolutely clear too that a flourishing private sector is the key to getting people off welfare benefits and into work. And throughout the election they trumpeted the fact that two million new private sector jobs had been created during their first term. Nearly half these jobs are in retail. Which means that, for the Conservatives, what's good for retail is good for Britain. Is it any accident that so many shots of David Cameron and George Osborne during the election campaign were in supermarkets and supermarket distribution centres. David Cameron even did a Q&A the day after the final Question Time at ASDA's head office.
The downside to this, of course, is the number of these jobs that are low paid, or zero hours contracts (with one retailer being very associated with the latter). And I think we can expect that during the second term in office there will be a lot of pressure, just as in the US with fast food restaurants, to increase the lowest wages to a 'living wage' type level.
From a consumer demand point of view, the Conservative majority is almost certainly good for business. With their commitment to increasing the personal tax allowance, the raising of the higher tax rate threshold and their commitment to raise neither National Insurance nor VAT rates, and assuming the inflation rate and interest rates stay down, we can assume a steady growth in real earnings and a continuation in the recent strong growth in retail sales. Barclaycard's Q1 consumer spend data confirms this higher level of consumer confidence and spending.
All of the first week Labour Party analysis is that Labour failed, certainly in England and Wales, because they weren't on the side of aspiration and ambition. They are likely to move themselves back to the centre during the next five years. The Conservatives too have said already that they want to recapture the mantle of 'One Nation', that they want to be seen on the side of the working people, that they will govern as blue collar Tories. Both parties are going to be obsessed with people who work in the private sector and consume from the private sector.
Britain is a nation of shopkeepers. But also a nation of consumers. Employment growth will come from retail. Consumer spending growth will be focussed on retail. There is now a political consensus about this. Which is all very good news for retailers.
Richard Warren is chief executive of DLKW Lowe, which counts Morrisons, Post Office and The Electoral Commission among its clients.