Happy 5th Birthday to the Recession
So apparently today, 9th August, is the 5th anniversary of the recession starting. I know that there are some economists and politicians who call it "double dip" but for those of us on the ground its been pretty constant for the whole 5 years!
I don't know what event led to 9th August being the offical start to the recession but for me it was September 2008 when reality struck. We had been exhibiting at Top Drawer and when I emerged from the tube in to Paddington the papers were all screaming about the collapse of Lehman Bros bank. I remember the feeling in the pit of my stomach, similar to when you got dumped as a teenager, as I saw the pictures of people leaving the bank with their possessions in cardboard boxes.
I'll be honest and say that if I knew then exactly how tough it was going to be I would have gone back to Top Drawer the next day and sold off every piece of stock we had at knock down prices and walked away! The recession meant that consumer demand declined, the big boys slashed their prices to try to maintain volume, the pound crashed against the dollar making purchases much more expensive and all in all 2009 was a really grim year.
But here we are, 5 years on. Our business has changed completely and all for the better. We always had knitted toys in our range but now we have no traditional soft toys. We always cared about who we sourced our toys from but now we actively source from fair trade suppliers where ever we can. Our customer base has also changed and we mainly work with Independent retailers. We still manufacture toys for other companies but they are not multiple retailers. They are smaller companies who need our expertise and we work very well together.
Possibly the biggest change is that we work in a very different environment. The rumour was that Woolworths only made a profit in the months of Oct/Nov/Dec but this was sufficient to keep them going for the rest of the year. Can you imagine running a business like that now? Every product you sell, every customer you sell to must now be profitable.
Our high street has changed out of all recognition. So many household names have disappeared we can't even remember them all (Woolworths, Game, Clintons, Borders, Habitat to name just a few).
However UK retail sales are still around £300bn, 1 in 10 of those in employment, work in the retail sector. There are 450,000 shops in the UK owned by 300,000 companies. Internet sales represent under 10% of retail sales but are still growing. Next up is shopping by phone which is set to boom as we all adopt smart phones.
The recession has created a new business environment but it is still possible to thrive. You cannot depend on a strong £ to buy cheap products from China, or a stong Xmas to make your annual profit but there are still opportunities to run a profitable business.
Now all we need is for some of the larger companies with their entrenched views would catch up with our Brave New World. Upward only rent reviews and 3 months payment in advance do not belong in our new economy. Growth and sales do not come automatically you have to work for them and part of this should be ensuring that the high street is accessible to new starters.
So how has the recession been for you? Please comment on our Facebook page
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