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Tesco share price: Never mind spending, why aren't we talking about making?

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As Tesco’s profits slip, we British should spend less time in shops, and more on the factory shop floor.

Oh no! Tesco made a marginally less obscene sum of money over the Christmas period than expected and – gasp! – may see profits slip by – help! – a full percentage point. No wonder the mega-supermarket’s shares crashed by 16% yesterday and headlines were splashed all over the papers because, really, this sounds like the worst news since, oh, I don’t know, the sinking of the Titanic or something.

Loss: Nearly £5billion was wiped off the value of Tesco after the firm revealed a fall in Christmas sales

Or then again, perhaps it’s just a gigantic fuss about nothing. I mean, I’m no City boy, but it seems to me that if a 1% drop in profits leads to a 16% drop in shares, then either the market is overreacting with the hysteria the FTSE 100 increasingly displays nowadays, or the shares were massively over-valued in the first place. Or quite possibly both.

  More... Bleak Christmas wipes £5bn off value of Tesco - should the new boss take the blame? RUTH SUNDERLAND: Should the new Tesco boss take the blame?

Meanwhile, the real significance of this story seems to have been entirely overlooked. You see, what’s deeply worrying, and symptomatic of our nation’s economic woes is not that shoppers spent a little less in a particular shop at a certain time of year. It’s that we care about it so much.

Buying power: Our entire economy relies on persuading consumers to maintain their shopaholic ways

Napoleon famously dismissed England as a nation of shopkeepers. A little over two hundred years later that statement needs modifying somewhat. Today the whole of Britain is a nation of shopkeepers and shoppers.

Our entire economy depends on persuading British women, who are responsible for the vast majority of retail expenditure to maintain their shopaholic ways. It doesn’t matter if they get hopelessly into debt buying designer dresses they never wear, handbags that cost as much as a decent secondhand car, or high priced Taste the Difference food that doesn’t actually taste any different. They must, at all costs, keep shopping.

Meanwhile, almost no one talks about making. As in producing actual saleable objects in factories, shipyards, steelworks, building sites and so on. It’s a boring business, I know and, as our economy clearly illustrates, far less interesting to bright young Britons than doing dodgy deals in the City, or selling glittery geegaws in a snazzy shop. But making things is what, in the end, makes money.

As it happens, we Brits are better at manufacturing than we think. Take cars, for example. Whilst the ups and downs of every shop in the country have been studied like a goat’s entrails in an ancient soothsayer’s tent for signs of growth or decline, the car industry has quietly been booming. Most people probably think we build far fewer cars in this country than we used to. In fact the exact opposite is true. More than 1.4m cars a year are built in the UK and most are then sold abroad, generating £5bn in exports.

Discount haven: We have turned our entire country into one giant Blighty Bargain Basement

There’s just one catch. Virtually all of the companies making those cars are now in foreign hands. Land Rover and Jaguar belong to the Indian company Tata (yes, the very same India to which we send foreign aid). Volkswagen own Bentley and those ultimate icons of British motoring, the Mini and the Rolls Royce are both now made by BMW.

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Why did this happen? Because, being a nation of shopkeepers, a nation that truly knows the price of everything and the value of absolutely nothing, we have turned our entire country into one giant Blighty Bargain Basement. You want our airports, señor? Be our guest. You like the look of our utilities, monsieur, or our train, power and car companies meinherr, or our football clubs, comrade? Then you shall have them!

If we British could find a way of packaging our grannies and flogging them off to the nearest Qatari investment fund, we would. Meanwhile, in Germany – the nation whose economy totally dominates Europe - the shops have only recently been allowed to stay open after 6.00pm on weekdays and although Saturday opening is now more common, none of the nation’s states allows general shopping on Sundays.

Their factories, however, keep making things day and night.



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