Yesterday was the summer solstice – the longest day of the year. Yes, the summer may only just have arrived, but essentially from here on in, the days get shorter, and the nights get longer. I bet that’s cheered you up, hasn’t it?!

Hopefully the fleeting glimpses of sun we’ve had this week – and the tantalizing promise of a rather glorious weekend and week ahead – will have kickstarted sales of outdoor toys. We saw in last month’s Circana data the difference that even a couple of sunny days can make (outdoor sales were up 5% in May, turning the overall market positive for the first time in a while), so a prolonged period of good weather can only be a good thing. A bit of sun, England unbeaten at the Euros, the hope of a fresh start for the UK in a couple of weeks’ time… if that doesn’t cheer everyone up, I don’t know what it will take. And imagine how good it would be if we actually win the Euros (remember which government was in charge the last time the England football team won a major tournament…just sayin’).

There was further encouraging news this week when it was announced that inflation had come down to 2%. We won’t get any change in the interest rate until at least August, but the prospect of a modest cut in the autumn just got a step closer. That said, it’s important to keep the inflation drop in perspective: prices are still rising, and they’re rising from a base which is 20% higher than when inflation was last at target. In the three years prior to this period of inflation, prices had risen by just 5%. So, everything still costs a lot more than it did a few years back, and pressure on consumer budgets remains – just a little less pressure than before.

Data company Kantar’s latest research makes interesting reading: last month’s survey recorded a rise in people feeling better about their finances, with over one-third of the 10,500 people surveyed describing their financial position as “comfortable” – and just today, the Office for National Statistics (ONS) has reported a “better than expected” increase in retail sales in May. However, almost 25% admitted that they were still “struggling.” And there, in a nutshell, is the conundrum for retailers: a percentage of their prospective customers are feeling more optimistic about their finances, while a similar number are still finding things tricky. Let’s hope that the balance continues to tip in favour of people feeling more optimistic as we head towards the festive season.

One major concern for toy companies is the ongoing rise in shipping rates. As predicted in an article we ran in our June issue written by the Warrant Group’s Stephen Garrity, it’s disappointing to see that the cost of containers is going through the roof again. And just to add insult to injury, a variety of surcharges are also now being introduced: Emergency Space Surcharge (ESS), Peak Season Surcharge (PSS) and General Rate Increases (GRI) are all being applied, with a widespread belief in the shipping community that rates will rise even higher in July. Give it a few weeks and there will no doubt be a few more acronyms added to that list – they really are taking the PSS.

Unfortunately, as far as shipping is concerned, we’re being buffeted by the perfect storm: space remains tight, demand outstrips capacity, the Houthi rebel attacks are continuing, and the number of void sailings is increasing. Perhaps worst of all, shipping companies – not known for their loyalty to customers – are reneging on long-term deals that were agreed months ago, knowing they can get more for that space now. I have some sympathy over the prevailing challenges, but cancelling existing agreements is wholly unacceptable and will undoubtedly lead to accusations of greed and excessive profiteering. Not that shipping companies seem to be too bothered about their collective reputation – although in my experience, they do get very tetchy when people accuse them of being a cartel. But can you blame suppliers for thinking that when they are on the receiving end of this sort of behaviour?

It’s not just the uncertainty for suppliers that is the issue here (although that’s a massive pain)– if someone doesn’t get a grip on this, there’s a real risk that that retail prices will have to rise to cover the extra costs, which in turn puts inflation at risk once again. For that reason alone, it would be good to see governments being brave enough to put free market thinking to one side and step in to limit the damage. But then, as we have seen over the past month of campaigning, politics isn’t like The West Wing or Designated Survivor – when MPs are being accused of grubby behaviour like using insider knowledge to bet on the election date, they can hardly have a go at shipping companies for hiding behind the dynamics of supply and demand, however shady it may be.

There are still some big challenges ahead for suppliers and retailers in the second half of the year, and there is plenty of evidence that we are a long way from being out of the woods yet. This week, the Wonder Group (formerly Amscan) announced its intention to appoint a company to explore options to bring new investors into the business. Coming after Smiffys announced a similar move a few weeks ago, there is potentially going to be major upheaval in the Dress Up & Party market. With Halloween just around the corner, let’s hope both companies manage to find a way forward very soon.

Over at WH Smith, I hear that the majority of the online buying team has been made redundant, including trading manager for general merchandise Amanda Corrigan. While there has been no official public announcement, it does appear on the face of it that WHSmith is significantly reducing its online commitment going forward (I guess there was a clue when it declined the opportunity to take over the running of the Toys R Us online business). Amanda is currently looking for a new role, as I am sure many of her team are – hopefully they’ll find new opportunities soon.

Enjoy the mini-heatwave that’s apparently on the way and look on the bright side – if England don’t win the Euros (something which I doubt many of Rishi’s team are betting on after last night’s game), Southgate could be bumping into Sunak down the job centre very soon. Every cloud…