This week the good, bad and the ugly of world politics and business meet on the slopes of Davos for their annual World Economic Forum crystal ball session. This means we can expect another barrage of mixed messages on what the future holds from ‘the experts’ and their interpreters from the business media. Britain powers out of recession or triple dip? You pay your money and you make your choice. That old maxim doesn’t really cut it for businesses constantly bombarded by the latest economic facts and figures leaked from the Treasury or conjured up by the myriad of gurus that wheel themselves out to pontificate at every possible juncture. Each statement is a potential knock to business confidence.
But, I hear you say, one needs to know all the facts – and that includes the ongoing debates – to make informed business decisions. But following a roll call of famous names such Blockbuster, Comet, HMV and Jessops all hitting the headlines and fire sales, what is ‘joe public’ to think? More precisely, what is UK plc and its constituent parts to make of the often conflicting news.
One week we hear employment is up, with engineering leading the way. Then, businesses growth forecast to be ratcheted down by the Bank of England. This to be followed in short order by green shoots springing up in areas with profits declared by supermarkets, then a series of job losses and closures. The media reports on every turn and Twitter trends on what is up and what is not.
Little wonder that between the doom merchants in some sections of the media and professional soothsayers – the business community is left somewhat perplexed. Just look at scare stories such as ‘The End of Britain’ screamed by Money Week counterbalanced by a whole new way of modelling economies as outed by The Economist. Ladle on top of this maelstrom false horizons through various Government agencies and a constant pouring of fuel on the embers of the last recession by politicians of various hues. As a result business confidence moves up and down witnessed by regular reports in the financial press; CityAM shows a survey by Deloitte of Finance Directors indicating that there was a 40 per cent chance the UK would suffer a return to economic contraction in the coming two years.
The answer, though, is not to panic. People still need to live. They need transport. They need to feed themselves, buy clothes, use banks, decorate their homes, buy a gadget, visit their local hospital, get an education, get hitched, have children, get old gracefully, take a break…the world goes on…and money goes round and services and products are rendered and paid for.
Hold that thought for a second as we return to the news agenda. ‘Business secretary Vince Cable denies the retail sector is in crisis despite recent administrations’ is the bold headline in industry voice of the High Street, Retail Week.
Meanwhile we learn that pressure is mounting on the Government to ease the burden of business rates following the collapse of high street retailers in recent weeks. The unkindest present just prior to Christmas was the first domino to topple, electrical retailer Comet. But here’s where it gets interesting. Dixons – the group which includes PC World (not famous for its customer service) and Currys – reported an 8 per cent uplift in sales over the 12 weeks leading to 5 January. The firm estimates that its full-year profit should fall between £75-£85 million.
As ITPro.com reports, Europe’s second-biggest electrical goods chain attributed its robust sales growth to increased demand for tablet devices, selling “well over 1 million” units over the holiday season. Tablet sales were phenomenal across our markets, which was good to see but which impacted overall headline margins somewhat,” said company chief executive, Sebastian James. “White goods were also strong, particularly in the UK,” he added.
Another possible (cynical or realistic?) explanation for Dixons’ seasonal good fortunes may lie in the downfall of its sector rival, Comet.
Other sectors are reporting mixed fortunes. In engineering, Honda has cut 800 jobs on the back of reductions in production and that has inevitably had a knock on effect on the supply chain including logistics partners.
Our consultant team at Montpellier PR produced a report published this month for client Link51 supported by the UKWA (United Kingdom Warehouse Association). The message was loud and clear as reported in industry media including Connecting Industry. The findings point to the fact that the industry (read many others sectors, not just logistics!) is at a cross roads. The clock is ticking for those who are slow to adopt technology and challenge traditional paradigms of how to do business in today’s economic roller coaster economy. So, the warehousing and logistics industry is on a ‘crucial countdown’ where only those companies willing to be flexible and revolutionise the way they do business will be fit enough to last the course over the next 12 months.
‘Businesses that embrace technology innovation will be in pole position to succeed. They will also be prepared to challenge and reinvent conventional business models and ramp up commitment to energy efficiency measures ahead of legislative requirements,’ explained John Halliday, managing director of Link 51 in the report. ‘However, the sub-text is a stark reality for those who are slow to adopt innovative strategies and will probably not be around in 12 months time.’
Meanwhile, the report confirms that reduction of carbon footprints are no longer pipe dreams. The sustainability agenda and drivers to reduce CO2 emissions, energy use and other hitherto ‘nice to haves’ are now firmly at the top of corporate agendas.
The smart businesses, in almost every sector and market you can think of, will not be those who are held hostage by the slings and arrows of outrageous fortune. The successful ones are brave. They have strong leadership, encourage staff to go that extra mile and innovate in products, services and delivery. They are smart in the way they leverage marketing opportunities. They adopt new media. They use social media platforms to engage with stakeholders.
So, next time you switch on the radio, watch the TV, go online for your dose of news, Tweet or check out LinkedIn, don’t just say woe is me. Make sure your business is getting coverage and making the headlines for all the right reasons!
This blog post was written by Philip Hicks, Director at Montpellier PR.
Image courtesy of City A.M.