goldilocks index shows porridge is hot
Whilst the big freeze coupled with the rise in VAT has slowed sales on the high street, shoe shops, leather retailers and porridge makers have got off to a flying start in 2010.
According to the CBI’s latest Distributive Trades Survey, 72% of retailers say that sales had dropped or were largely unchanged.
“The big freeze kept many shoppers away from the January sales and the VAT hike has hit bigger purchases like furniture and electricals,” says Andy Clarke, Chairman of the CBI Distributive Trades Panel.
Only grocers, footwear and leather goods retailers have seen strong sales. Porridge sales in particular have rocketed. In the first 3 weeks of the year, independent cereal company Rude Health saw a 400% increase in sales of their gourmet porridge. To use the Goldilocks Index analogy, Rude Health’s porridge sales have been as hot as Father Bear’s breakfast.
“Porridge has seen a real resurgence in the last few years. But the spike in sales this winter has taken everyone by surprise. People just can’t get enough of it. This January we had to make 5 times the quantity we usually produce,” says Nick Barnard, Managing Director of the independent cereal company.
The porridge market is valued at £53 million, with 3.8% y-o-y growth compared to 2008. Sales of Rude Health porridge grew by 108% between the period Sept-Dec 2008 and Sept-Dec 2009.
The Federal Reserve Bank of Chicago uses the Goldilocks Index as an analogy to describe the level of economic activity. When activity is growing at a steady rate they call it “just right” – like in the Goldilocks story. The Chicago Fed describes activity as hot when a business or economy experiences growth greater than its usual rate.
CBI - Distributive Trades Survey January 2010
‘Retailers Disappointed By Weak New Year Sales’ News Release
TNS World Panel
Press Office: Laura Chatterton, 020 7656 5054
Rude Health UK Sales 2008 – 2010