Financial Market

The British shops and stores association, abbreviated to BSSA, have released a Q4 retail sales report for 2008 that has stated that sales for independent non-food retailers fell by 5.2%.

This 5.2% is compared to figures for Q3 2008, and mark the biggest quarterly fall in BSSA’s history, confirming the impact the financial downturn is having on the high street.

Within the report BSSA stat that furniture retailers and department store have been the worst hit, with clothing and gift stores also having recorded huge slumps in sales.

Bucking the trend the same report showed that retail in Scotland had actually grown 1.8%, compared to every region in England recording negative growth.

As just one example of the impact of furniture retailers, land of leather this week went into administration, after failing to secure new financing.

Accountancy firm Deloitte has been appointed as administrators to the UK chain, putting at risk the 850 jobs at its 109 stores across the UK and Ireland.

Land of leather had specialised in leather interiors, selling a range of other products including bedroom furniture, electricals and kitchen fittings.

On the week that we finally slipped officially into recession, reports that search giant Yahoo generated a loss in Q3 of 2008 should not be surprising.

That is until the figures are looked at a little closer, where the losses of $303.4 million compared with a profit of $205.7m in Q3 2007 are a result of reduced sales in online ads.

In times of recession it is a well known fact that online advertising can see a surprise growth, as advertisers look to continue to do business with improved ROI. Online advertising can not only offer this, but in time of financial hardship can offer precise measurements of investment to revenue generated that other medias such as print cannot.

It is these factors that have made online advertising fairly recession proof; however the results released by Yahoo show the true extent of the financial downturn.

Many analysts had expected far worse results when Yahoo released their profit figures, with the majority of loss put down to one off costs the company was committed too.

Yahoo had rejected a $45.5 billion from search competitors Microsoft earlier in the year.

“The company made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves,” : Ms Bartz. Yahoo’s new chief executive

Ms Bartz also gave a cautious outlook for Q1 2009, with total revenue expected to fall $1.82 billion to $1.73 billion on Q1 2008.

On the back of a bleak six months in the British economy at least one Company proved they although not recession proof, there are at the very least signs of improvement in the foreseeable future.

The search giant Google saw revenue rise and profits fall in the first quarter of last year in what is being seen as positive end of year financial results.

Net profit for Q4 was $382 million, a significant drop from $1.21 billion in Q4 2007. This 68% net profit fall was actually better than many analysts had predicted, and overall total revenue was up 18% to $5.7 billion.

“Google performed well in the fourth quarter, despite an increasingly difficult economic environment,” said Google boss Eric Schmidt.

“At least we have something to feel good about with this Google news in what has been shaping up to be a gloomy earnings period,” - Keith Wirtz at Fifth Third Asset Management.

In related news arch rival Microsoft posted lower profits on Thursday announcing 5k redundancies.

With such a long break we thought it apt to return with big news. It is no surprise to anyone how bleak times are looking in the financial world right now, but today is the day that we officially recognise Britain as a country in recession.

The report released this morning has confirmed what many have believed for the last 6 months. Official Government figures have confirmed the UK is now in recession for the first time since 1991.

GDP fell by 1.5% in the last three months of 2008 after a 6% drop in Q3. This falls in line with the widely accepted definition for recession, tow consecutive quarters of falling economic growth.

Not only is the UK officially in recession but the figure released represent the biggest quarter on quarter decline since 1980, and 1.8% fall on Q4 in 2007.

On the back of the released report the pound continued to fall against the Dollar, now at a 24 year low at $1.36 Dollars to the pound.

Within the report it was highlighted that the UK’s manufacturing sector showed the biggest retraction, counteracting by 4.6% after falling 1.6% in Q3.

Unemployment is also up with nearly 2 million people currently out of work. On top of this the housing market remains severely depressed with retail figure also bleak.

“It is difficult to see why things should improve in the foreseeable future,” - Andrew Smith, chief economist at KPMG.

Bleak news indeed for the British economy, but at Financial Market we are here to help keep you up top date with the latest financial news.