So now that one seems inevitable – at least Alistair Darling thinks so – it’s not surprising that there’s a degree of panic.
That’s why we’ve dedicated this issue to helping you beat the downturn. We’ve asked retail greats who have seen it all before how they dealt with it and have filled the magazine with practical advice on how to take on the market and win.
Tougher times call for a renewed focus on the retailing basics. It stands to reason that at a time when shoppers are less inclined to spend, your offer needs to be better and your stores and web site more inviting than your rivals if you’re going to capture your share of that shrinking consumer spend.
Sensible discounting is inevitable and can generate results. But, as those retailers that have gone under this year have shown, throwing away margin willy-nilly is the surest route to retail oblivion.
But, as no one can predict how long and deep this downturn will be, you can’t rely on sales growth to drive profits. Retailers have been great at ruthlessly cutting cost out of their businesses over the past few years, but the reality is more will have to be done.
It’s all about looking at every point at which money leaks out of your business. Difficult conversations with suppliers – whether of product or services – have to be had. Jobs will probably have to go. However, there’s a fine line to be walked. Stop investing in your store environment or your multichannel presence and your competitors will steal a march. It’s about finding the cuts customers won’t notice.
It hasn’t felt much like it over the past decade, but ultimately economies are always going to be cyclical and the real test of how good a business and its management is when times are tough.
It’s not easy, but get it right and not only will you ride out the bad times, but you’ll be in great shape and raring to go when the economy comes back.
Watch Tim Danaher and George MacDonald discuss the week’s retail news in TGi Friday
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