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Blackfriar: Let's not get carried away by claims of being over worst
We are hearing a good deal about the end of the recession being in sight.
Yesterday's purchasing managers' survey for the services sector showed activity expanding for the first time in 13 months in May, giving a major boost to hopes that the economy is close to a recovery.
In fact we are seeing euphoria on both sides of the pond with claims that the recession will be over soon.
Headlines and comments such as "It's all over!" are giving false hopes to an economy that needs to prepare for worse to come rather than celebrate a phoney recovery.
While we have seen a small improvement in home sales and manufacturing output in Europe and the US, the bigger decider controlling consumer and business confidence is unemployment. This week new European figures showed unemployment rising from 8.9 per cent to 9.2 per cent.
David Blanchflower, the only Monetary Policy Committee member to accurately predict this recession, said we should expect another 100,000 jobs to be cut every month well into 2010.
Blanchflower believes the worst isn't over and any green shoots in the economy should be viewed with scepticism.
Economists are advising that while some limited growth could occur before the end of the year, financial conditions will remain very difficult and relapses in activity are highly likely with the result that sustainable growth will not develop until 2010 and then only gradually.
We need to stay realistic. Promises that the economy are on the way up may boost confidence, but they are damaging in the long term. We need to hunker down and get through this difficult time, not chase false dawns.
IN the war for dominance among the high street grocers, one name stands out from the pack.
Upmarket supermarket chain Waitrose, part of the employee-owned John Lewis Partnership, has caught Blackfriar's attention for all the wrong reasons. Finally cottoning on to the flow of shoppers leaving it for cheaper rivals, Waitrose has launched a value own-brand range.
Called its "essential" range, it comprises more than 1,400 staple grocery items at "everyday, affordable prices". Waitrose is gradually getting the message out by plastering adverts on billboards, across newspapers and on TV.
But Blackfriar thinks the launch is about a year too late. In that time consumer sentiment has tumbled, the appetite for bargains increased, and Waitrose has been left trailing in its rivals' wake.
Meanwhile, Leeds-based Asda and Bradford's Morrisons have continued to grow market share, buoyed by customers' perception of their affordability. Hard discounters such as Aldi and Lidl have grown at a rate of knots.
Sainsbury's has made a big play of its Basics range, using advertising ploys such as recipe cards and Feed Your Family For A Fiver, to boost its sales.
"Customer research tells us that although we are a destination store for quality products, shopping for our own label essential items hasn't been as easy as it could be," says Mark Price, managing director of Waitrose.
Waitrose, determined to keep its quality tag, refused to buckle until it was forced to. The group is shy of calling it a value range – because it doesn't want to tarnish its middle class image. "The quality you would expect at prices you wouldn't," runs its strapline.
But if Leeds food manufacturer Northern Foods can successfully juggle business with Poundland alongside upmarket retailers, and Sainsbury's can stock upmarket Taste the Difference food next to its Basics range, then why couldn't Waitrose far sooner?
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Wednesday 23 May 2012
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