Current climate puts businesses on The Precipice

We live in interesting times. A recent spate of trading updates and announcements from some of the big merchants would lead you to believe that trading is improving and profitability’s climbing too. Statistics are always interesting!

Meanwhile, we are also seeing a massive TV advertising campaign by one of the ‘shed’ operations, which “has its name on it”, to persuade us to turn left and shop with them. There are many reasons to increase generic advertising, but the enormous costs are not signed off lightly – there has to be a real need before any financial director agrees.

In the last week we have seen the demise of Focus, where 178 outlets and 3,900 staff await their fate. Let’s hope that for the employees it’s good news, but at the same time we should also consider the trade creditors who will probably catch the worst cold, thereby affecting many more jobs.

It strikes me that what we actually have is, at best, a stagnant economy, within which we’re all fighting to hold onto or even expand our existing sales levels. An old boss of mine called it ‘The Precipice’: can you cling on while others drop off, leaving enough for you to survive on?

As I said, interesting times – may your rope be strong, your nerves stronger and perhaps a bread knife might come in handy if you see another rope nearby; it’s a brutal world out there!

Keith Fryer
Co-director
T Brewer & Co