Greetings Today magazine, giving you the bigger picture

07 April, 2010

Street fighting

By Terry Harvey - M&P Cards

I recently learnt that Marks & Spencer and John Lewis had introduced budget products into its ranges and I could not help thinking, ‘where will all of this end?’ Our top two high street names succumbing to the recession and seeking the bargain shopper!

And then it struck me: this is the beginning of the end of the recession.

Think about it. When the economy started to take a nosedive into the pavement the opportunist retailers took advantage of the situation by opening swathes of cut-price discount stores with great success. The opportunities grew in this sector fuelled by bankrupt stock, struggling manufacturers and Jo Public looking to recoup the twenty extra quid a month he was paying on his utility bills. Discount shopping was assisted further by, quite literally, the biggest advertising campaign ever seen across both television and newspapers sweetly named ‘The Credit Crunch’.

Crunch Gate, as it will be known in years to come, was responsible for the change in shopping habits of millions of consumers across the country. The campaign was incredibly well orchestrated with successful ‘mini campaigns’ that even attempted to throw off the ‘shopping in the slums’ image by snapping celebrities in discount stores.

However, the actions of M&S and JLP are not the reluctant submissions of battle scarred retailers taking the ‘if you can’t beat them, join them’ approach. This is the war cry that will mark the swing of change and a restoring of order on the high street as customers are lured back to where they belong. The squeeze is now on the discount retailer who once wore his USP like a medal around his neck and is now wondering whether he should sell it for 99p or a quid.

The point is, this is all part of a cycle that will see shoppers heading back to familiar territory realising that you can get a bargain whilst stood on carpet and with some service at no extra charge.

Discount stores will diminish to a few exceptionally well-run stalwarts who would have existed with or without an economic crisis and opportunities will start to appear for new businesses.

As confidence grows, investment in retail will increase and rentable values will go up pushing out the last of the ‘pile it high’ brigade. In some sectors consumer demand for quality and innovation will eventually outstrip demand for budget products and the budget range will be pushed out the doors of M&S to make way for new merchandise. Before you know it we’ll be back where we started; or will we?

The funny thing about ‘cycles’ is that the ‘start point’ is really just down to your own perception of when you got on the merry-go-round.

The fact is, there will always be challenges in business but I believe we are at the start of the really fun part of the ride.

*Terry Harvey operates the M&P chain of independent stores on the South Coast.

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