| Weak dollar affects high street |
|
| Tuesday, 06 November 2007 | |
|
The weak American dollar is having an affect on the British high street, according to analysts.
According to the Financial Times, the low dollar is increasing retailers’ purchasing power, as they are increasing volumes of sourcing to south-east Asia and having the added benefit of cheaper manufacturing and currency gain of paying in dollars bought with the soaring sterling.
Arcadia Group boss Sir Philip Green stated the benefits to retailers of the pound climbing above USD2 were allowing chief executives to get away with poor underlying performance. If the British pound was to take a tumble, a truer picture of retail would emerge. Gavin George head of retail at Ernst & Young, stated the margin gain from Asian sourcing masked problems on the high street. He further noted the currency shift made UK retailers “less attractive to an outside predator, while US acquisitions or organic growth was becoming easier for British companies,” according to the Weekend FT. Whilst the British high street may benefit from its purchasing power, the American high street will no doubt see its own sales rise with Christmas shoppers heading stateside to buy their goods. |
