You may remember that, a couple of weeks ago, it was a bit windy and a little bit rainy.
Sky News, never one to under-egg the pudding, promised us hurricanes and floods approaching biblical proportions. Some retail sales directors had even started to pencil them into their weekly trading report as the main reason they missed target.
But everyone knew it would never be that bad, especially when we saw the same reporters who had been dispatched to broadcast live from the epicentre of the Lincolnshire earthquake. Everyone knows that when it’s really serious, they send the senior studio anchor out to do the news from the scene.
With the weather failing to deliver the real-life drama that 24-hour news channels thrive on, the media has moved onto the impending and apparently inevitable recession.
They have managed to dig up some previously unheard-of experts, who have somewhat gleefully said “I told you so” before anything has even happened.
To illustrate their predictions, they have used images from the Great Depression of people swapping cars for tins of Spam. The theory is, of course, that it was World War II that got us out of that recession.
Alternatively, for a more balanced gauge of the economic climate, ask a shopkeeper if the economy is contracting. If, as I suspect, most of our expenditure budgets for the forthcoming financial year have been reduced from last year, then yes, it will.
Despite spending less, the majority of our sales and marketing teams will have sufficient self-confidence to also forecast that they will outsmart the competition and deliver some sales growth to go with their cost-light EBITDA number.
Unfortunately, they can’t all be right. Sadly, the hardest hit will be the smaller retailers, as the costs of opening the shop are less flexible than for larger stores. Larger stores can keep staff hours to a minimum, but you’ve still got to have two staff and some lunch cover in most small stores, which can probably only support one. And don’t even get me started on rent, rates and utilities.
So how can we prepare ourselves for the worst? A cut in interest rates? Obvious and essential, but out of our control. If the winners in the battle for a bigger share of a diminishing pot are those who act faster and smarter, make sure you’re built for speed: cut the bureaucracy, make everyone a marketer and empower your team to make decisions quickly.
If you can’t get back to the floor, give more power to the floor: they know what works and what doesn’t first. Seek interdependency and a shared passion from the agencies that surround you and ask them early on for help with your business challenges.
Do whatever you can to hold onto your margin – it is the easiest thing to give away your profits for sales, so make it the last, not the first thing you do. And only panic when Trevor McDonald’s standing outside your shop doing the News at Ten.
Jacqueline Gold, chief executive, Ann Summers
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