Facing the fear factor
I was shocked to discover in a recent survey that nearly half the working population fear they may lose their jobs in the next six months. That’s a grim picture and is potentially bad news for our industry.
The survey of 1,000 people also asked what they would do if the Chancellor threw a little more money their way in his forthcoming budget. Only 5 per cent plan to spend it, the rest will either save it or use it to pay off debt. While I applaud people being a little more prudent following years of getting into debt, it is also a concern.
When millions of people are living with the fear of unemployment, regardless of how likely that is, they are clearly going to be less inclined to spend their hard-earned cash – particularly on discretionary items.
If people stop spending there’s a real danger we’ll end up on a slippery slope, prolonging the recession, and ironically the fear of losing your job could turn into more of a reality for thousands of people.
There’s no doubt in my mind that confidence is the key to our economic recovery. So what can we do to restore people’s faith and start to reassure them that it’s not quite as bad out there as it seems?
If people stop spending there’s a real danger we’ll end up prolonging the recession
At a recent customer listening group one lady said she thought the media should have handled the recession “more discreetly”. I think I know what she means.
It’s all too easy to seize on every crumb of bad news and whip it up into a doomsday scenario: “9,000 jobs slashed”, “400 redundancies announced”, “Banking industry in crisis”.
While all of these things are true, it is also fair to say that the vast majority of people will not be made unemployed during the recession. And those in work may even be a little better off – what with mortgage rates tumbling and energy and food prices beginning to ease. That’s why as retailers we have an important role to play.
There hasn’t been the carnage on the high street that many had predicted and while sales are soft in some sectors, are we really doing enough to project a more positive outlook?
As anyone who reads this column regularly knows, my view on retail is simple: by keeping your prices as low as possible you can actively encourage people to keep spending their hard-earned cash.
Relying on short-term deep discounts that are unprofitable is foolish in the long run. All you’ll do is make people even more cautious about spending their money as they sit it out for the next big Sales event.
To overcome fear you need to be courageous. And it falls on us as retailers to take the lead. So my plea to you is hold your nerve, lower your prices as best you can and don’t fall into the trap of talking the economy down.
We need to pull together to give our customers the courage to keep spending their way out of this recession.
Andy Clarke is chief operating officer of Asda