Is Britain Going Back To Its Roots - Seeds Are Worth More Than Gold
It is a little known fact that in a time of recession lipstick sales boom. It is true. In Britain at the moment unemployment might be fast rising, economic growth continues to shrink at an accelerating rate and consumer confidence plummet, but sales of lipstick and other cosmetic items of low value buck the trend of constantly declining retail sales.
Except for lipstick manufacturers, this is not a good sign. Rising lipstick sales are a sure indicator of a country in recession, of a country trading down and of a country getting back to its roots and back to basics. For it would seem that women unwilling or unable to spend money on the latest fashion but desiring their retail fix will instead buy lipstick to satisfy this craving.
And there are plenty of other examples of the UK consumer switching spending from high priced items and trading down and moving back to his or her roots.
Walk down any High Street at the moment and you will find in the restaurant market a tale of two cities. It is no longer a problem getting a table in that expensive restaurant, great for special occasions and treats. On the other hand eating in pubs, in the big chains and in fast food restaurants has never been more popular. People reluctant to stop eating out and slow to stop treating themselves continue to want to eat out but not at the fancy prices that they would pay in the boom years.
And whilst we are on the eating theme, this trend means that ready to eat meals are also soaring for the same reason. Indeed many retailers have built impressive advertising campaigns around this proposition. Staying in is the new going out in these economic conditions and to make sure that those staying at home have a good evening, those businesses built around selling or renting DVDs are also booming.
Indeed some people have even gone one stage further and adopted an even more radical approach and truly are going back to their roots. It is reported that more and more people are turning to their garden not only as a cheap and low cost pastime but also as a source of food as they start to grow their own fruit and vegetables. It is doubtful if 'The Good Life' is going to become a widespread phenomenon but it is a sign of our times and indeed the demand for allotments across the country is now at its highest level since the end of World War 2. We might no longer be digging for victory but we are digging for something.
Recession is not uniform. It does not affect all sectors of the economy equally and changing economic conditions will throw up opportunities to invest as the consumers change their behaviour to reflect these tough times and their changing financial circumstances. In essence this means shoppers search out value and move closer to their roots. In the good times shoppers may have been looking for treats, to spend money on items which showed off their status, to buy gold. Now those days are gone. It is now about value, it is about getting back to our roots, it is about hunting about lower cost purchases which last and endure.
And maybe for those looking to invest in stocks and shares the same rules apply. It is easy to follow the herd and to buy at the top of the market when markets are booming and prices rising. In these conditions the investor will be buying gold, expensive and glamorous. Now is the time to invest when prices are low and offering good value. Buy the right share now and the investor is buying seeds which will grow over the long term as the economy recovers, which it will, to be worth more than an expensive and highly decorative bauble.
So if you think that shares are looking cheap and very good value and want to invest in the stock market, you might be best to look at those businesses benefiting from the trend for the UK consumer to go back to their roots. As any gardener will tell you, in times like these, seeds are worth more than gold.