Have you seen the news today?

The front and back pages of the FT made grim reading this morning.

All of the following are direct quotes from the front or back pages of the main section:

  • Sales of home hair-dye kits and frozen food are surging as a Depression-era mentaility sets in across Britain, the head of Asda said yesterday
  • He warned that, as in the 1930s, the severity of the downturn would change consumer behaviour for a generation
  • Sales of ‘gimmicky throw away gifts’ for adults have collapsed
  • The most popular Christmas gift at Asda this year will be a jumper [watch out chaps…]
  • Sales of ready meals at Asda have dropped 40% as people choose instead to buy ingredients and cook from scratch
  • At Tesco, sales of coffee makers and thermos flasks are up 75% as people opt for home-made drinks instead of shop-bought lattes
  • A survey of 2,500 Asda customers showed more than half were going out less and almost 40% had reduced their visits to the hairdresser, a service usually seen as recession proof [I think it is very dangerous to view any business as recession proof]
  • October this year was the 1929 Crash equivalent for the debt markets
  • Fear of financial ‘Armageddon’ is staring private equity of funds, one investor warned yesterday
  • Woolworths holds its last sale [I used to love that shop as a kid :(]
  • Some 30,000 Woolworths staff face a bleak mid-winter
  • Begbies Traynor, the insolvency specialist, has 323 retailers on a ‘critical watch list’ defined as 70%+ chance of failing
  • It has been a hellish week for the newspaper industry.  Tribune, owner of the LA Times and the Chicago Tribune, filed for bankruptcy, while the New York Times Company hocked its new Renzo Piano-designed skyscraper
  • Worse still was the collapse of confidence in the sector’s ability to reinvent itself for the digital age

Wow!

The consumer is on her knees, the retail sector is in deep trouble and for newspapers it is even worse than that.

And I didn’t include excerpts from articles on the US car industry and Boeing.

At the end of the day this is just a cycle, a bad one, but just a cycle.  Things will get better.  All we can do at the moment is plan for the worst and hope for better.  Reading all of this has lowered my expectations of how bad the worst might be.

  • Cripes. Is this demographics at play, combined with a perfect finanical storm? I’m still “betting” on a 2015 return to normal.

    Very much glad I left the automotive industry in 2007 – let’s hope the web in general doesn’t fare so badly.

  • Cripes. Is this demographics at play, combined with a perfect finanical storm? I’m still “betting” on a 2015 return to normal.

    Very much glad I left the automotive industry in 2007 – let’s hope the web in general doesn’t fare so badly.

  • Far from saying that this recession isn’t big and bad, but at the same time ASDA’s surveys can’t be representative for the majority of the UK population.
    Unfortunately this crisis is worse than I expected at the very beginning and as always it’ll have much more impact on certain social groups than others. But I agree on the fact that – after all – it’s a cycle and therefore will come to an end.
    Cynically and from a start up perspective I think that having an early stage business now isn’t the worst thing in the word, because if you manage to bootstrap it through the crisis chances are that in 3-5 years the market will be bullish again and today’s early stage business will be top of the list for a new wave of trade sales or other exits.

  • Far from saying that this recession isn’t big and bad, but at the same time ASDA’s surveys can’t be representative for the majority of the UK population.
    Unfortunately this crisis is worse than I expected at the very beginning and as always it’ll have much more impact on certain social groups than others. But I agree on the fact that – after all – it’s a cycle and therefore will come to an end.
    Cynically and from a start up perspective I think that having an early stage business now isn’t the worst thing in the word, because if you manage to bootstrap it through the crisis chances are that in 3-5 years the market will be bullish again and today’s early stage business will be top of the list for a new wave of trade sales or other exits.

  • Robert Peston has a similar view…
    http://www.bbc.co.uk/blogs/thereporters/robertpeston/

  • Robert Peston has a similar view…
    http://www.bbc.co.uk/blogs/thereporters/robertpeston/

  • We’re beginning to see the rolling impact of collapses as well. Woolworths appointed adminstrators (Deloitte) last week and today made 700 workers at EUK, one of the largest distributors of entertainment products in the UK, redundant. Deloitte have now forced a “restructuring” team from E&Y to take over at Zavvi, because Zavvi owes EUK £106 million, and has made it clear that this could be a precursor to administration. Zavvi seems unlikely to be able to trade out of this position because it has limited stock partially because one of its main suppliers (EUK) has gone bust.

    So, like the banking industry, the interconnectedness of our retail industries could lead to a domino set of failures.

  • We’re beginning to see the rolling impact of collapses as well. Woolworths appointed adminstrators (Deloitte) last week and today made 700 workers at EUK, one of the largest distributors of entertainment products in the UK, redundant. Deloitte have now forced a “restructuring” team from E&Y to take over at Zavvi, because Zavvi owes EUK £106 million, and has made it clear that this could be a precursor to administration. Zavvi seems unlikely to be able to trade out of this position because it has limited stock partially because one of its main suppliers (EUK) has gone bust.

    So, like the banking industry, the interconnectedness of our retail industries could lead to a domino set of failures.

  • I hate to say “I told you so”, but Zavvi entered administration this morning:
    http://www.mcvuk.com/news/32791/Zavvi-enters-ad

  • It will be a happy Xmas for them 🙁

  • I hate to say “I told you so”, but Zavvi entered administration this morning:
    http://www.mcvuk.com/news/32791/Zavvi-enters-ad

  • It will be a happy Xmas for them 🙁