John Mullen, the CEO of DHL, in an interview with the Times, likened the High Street Retail Stores panic destocking as the equivalent to a run on the banks.
A quick walk around the High Street will tell you that they have all given way. And that even the hardest nosed of the retailers, those that target the upper end of the market and resist the urge to cut prices before Christmas, are now brandishing “20% off everything” signs all over their stores.
Even the ultimate January Sale – Harrods, are going early this this year. Harrolds, who have never in their history started their January Sales until the first working day after the new year, start their Sale on December 27th, as well has having 30% off various departments and seasonal reductions already.
The retailers seem to be dumping stocks as quickly as possible, in fear that there will simply be no future demand by shoppers, (even those companies who are generating profits and whose books are sound) and this creates the risk that this has become a self fullfilling prophesy.
We saw in the last weeks of November and the First week of December a standoff between the retailers and the shoppers. Retailers were holding off cutting prices in the hope that the shoppers would start buying, and the shoppers were holding off waiting for the retailers to drop the prices. The shoppers won, and now all retailers are dropping prices further and further desperate to grab a bit of that Christmas spend.
The problem with such a large reduction in inventory levels is that it is likely to hinder the recovery, which will eventually come. When companies have low invetory levels it prevents them from reacting quickly and flexibly to any upswing in demand.
As we go into the recession, and every family is feeling the financial pinch, the government announces the launch of an £11.5m scheme to teach children how to manage their finances.
The Populus poll of 1,000 parents and children, aged seven to 15, at the end of August found
·70% were discussing money more than at the same time last year. A third of families had opted not to take a holiday this year,
·62% had stopped having takeaways and meals out.
·36% of parents had already switched to doing their weekly shopping at a value supermarket, with a further 19% planning to do so in the future.
·Over half (56%) had stopped trips to the cinema and other entertainment-related trips.
These decisions are noticed by the children, and although 77% of parents said they would normally try to avoid exposing their children to money concerns, the present economic climate means that things that children have grown up taking for granted are becoming more of a luxury.
Almost a third of parents try to avoid the topic of money at home and a quarter of these said that was because childhood should be a carefree time. However maybe involving children in these discussions helps them to understand the context of their parents decisions and choices, and that the “pester power” that marketing companies rely on for so many sales may be replaced an gradual awareness that money doesn’t grow on trees, and that choices must be made.
The My Money programme will be rolled out to primary and secondary school pupils, covering topics such as how money is used and debt. A survey commissioned to mark the launch suggests children are becoming more aware of the credit crunch as parents discuss finances more openly. Chief executive of the Personal Finance Education Group (that Charity that will be implementing the My Money programme) Wendy van den Hende said: “The spending changes that many families are making can actually provide an opportunity to get conversations started at home and talk about practical ways of managing money. “
Older children should have some concept of money, and that financial decisions are not in fact carefree.One of the discussions which has come out of the Credit Crunch is that the UK society is a spend now society, looking for that instant gratification from consumer goods and spending with little thought or regard as to whether or not that spending is affordable.The current situation is a good one to grasp, and to show the children a good practise, and to put into place the sensibleness which we need to teach.
The BBC have run a story about AE Harris, a Birmingham company that have survived an amazing 10 downturns, including recessions and even the great depression.
The company started 128 years ago making Jewellery and now made laser cutting and tool making equipment and software.
Company Chairman, Russel Luckork said “I sincerely hope that I will not have to reduce my workforce this time and I will be fighting tooth and nail to make sure that doesn’t happen. I think we have enough irons in the fires with our customers to make sure that we keep all our people in employment.
I don’t believe that it will be a deep recession, I think it will be a shallow but I think there’s a danger of talking ourselves into a deeper recession.” ”My advice to companies that are struggling at the moment is to draw in your horns. You have to cut salaries, remuneration and costs. However ruthless it may seem you have to stay in business. The good times will come again. In my experience when there have been bad times, there have always been good and very lucrative times just round the corner. You just have to survive and stay patient”
Russell story highlights a number of important points. In the recessions and even depressions up until the 1970’s most people got their news from either the daily newspaper, a daily edition of the news on the television, or maybe both. Meaning that the news that was reported had happened, usually the previous day. The 1980’s brought with it the “news updates”, and satellite feeds, which meant that news was reported as it was happening. Most people will remember the Iranian Embassy Seige as the turning point for the “live” reporting.
Now we have 24 hour news channels, that have 24 hours to fill with news each day. And this means that the media now fill most of this with speculation. They no longer report on the press release that has been made, but instead discuss, speculate and even interrogate people on the expected contents.
We will all have known about stories & situations where the media only reports the negative, the doom and gloom, and Russells fears that the media may worsen the recession through continued negative reporting is a very real risk.
Markets are volatile things, as is business confidence, and that is just the key to it all – confidence. Businesses, investors, buyers, employees need to be able to build up that confidence, that things will get better, that things are getting better, and so we need a media that can bring confidence and good news back into the arena.
The media will argue that they report what people want to hear, so do we really want to hear only the doom and gloom stories. Some news stations have been running “redundancy totalisers” this week, to show the numbers of jobs lost. Can we lobby these stations into running the same kind of stories when the economy starts to pick up again?
Fantasy Couriers has commissioned a poll of UK small business to find out what the real situation is, is it all as bleak as the Media are portraying, or is it just that old chestnut that bad news sells more copies than good news.
Teaching Van Drivers New Driving Techniques could save their company’s money, even the smallest saving on each van through fuel-efficient methods will have a beneficial impact on the company. to stay in business. Alistair Patterson from Simply Clearances has vans traveling all over the UK every week, he has found that their fuel costs have been taking up more and more of their profits, which made them examine how they can make savings.
Mr Patterson said “Leaving about 15 minutes earlier for each job means that we can reduce the average travelling speed from 70mph to 60mph, this has increased the mileage that we get from a tank of fuel from 480 kilometres to around 600 kilometres. I was aware that savings would be made, but even I was surprised about the extend of these, i expected to get an extra 50km a tank, not double that!”
Industry experts say that the surprising large savings are due to a number of factors which tend to arise out of a slower average speed, there is a lot less accelerate/brake, and this contributes a lot to saving fuel. And the slower average speed tends to mean a generally calmer attitude which helps in spotting hazards ahead and more predictive instead of reactive driving.
Top tips for saving fuel are;
Plan to leave your depots a little bit earlier each day for your destinations, this should help you reduce your speed, saving you fuel, and will also help you feel more relaxed too. Don’t forget that there is also the speeding tickets to consider and fines, if you’re driving at steady speeds, particularly on the motorways, then you don’t even need to worry about these.
Avoid harsh acceleration and braking, this helps to reduce wear and tear, and it saves the fuel dump every time you brake & accelerate.
Look forward, read the road and the traffic, plan for hazards and drive for the conditions. This should help to reduce stop/start driving, thereby reducing fuel consumption and making you a safer driver.
Remove all the clutter from your van that you dont need, this should help reduce fuel consumption. You will be surprised just how much stuff you carry around “just in case” and then never use.
Remove any items that may affect your aerodynamics, roof rack or top boxes they will only reduce your efficiency of your van. Be aware of the drag of a trailer, plan ahead and only use these items when you need them, and remove them as soon as possible when you’ve finished with them.
Making a living as a courier can be a tricky business, so anything that can benefit your company must be a good thing, even the smallest saving is worth having.
Fantasy Couriers game is almost ready to play and it should help you identify new ideas with savings and your company profits. http://www.fantasycouriers.com
We finally see a supermarket war has broken out, and the result is lower petrol pump prices, finally back below that £1 a litre mark.
The thing is, the price of a barrel of oil has fallen form $150 to $80 but we’re still only slowly seeing 1p – 3p reductions working their way through to the pumps. It’s also very interesting to note that it’s not the oil companies launching the price cuts, but instead the supermarkets, shaming the oil companies into following suit.
It has been said that it can take up to 6 weeks for a reduction in a barrel of crude to work it’s way through to the petrol pump price. However, increases in the price of crude seem to have an immediate, sameday, increase in our fuel bills.
Do we have a case of the oil companies wanting to have it both ways? Or is there any underlying commercial reason that the price cuts have been so slow to work their way through to the consumers. Some my cite the financial crises, unstable markets, fuel companies being reluctant to pass on cuts incase the next week they need to increase the prices again, and all the bad PR that would bring with it.
Or is it simply the case that the fuel companies will charge what the markets will bear, and that during the last few weeks consumers, the media and everyone else has taken their eyes off the price of fuel, and have been watching the FTSE instead, and so the oil companies have simply sat quietly by and taken advantage of a couple of weeks of higher margins.
If this is the case, is it wrong? Are we right to expect the oil companies to pass on the reduction in the price of crude, after all they are all commercial companies there to make a profit. They know that there are lean times coming and that now is not a time for a low margin/loss making price war. After all, many of the banks failed to pass on the government’s required 1/2 % interest rate cut onto new borrowers, choosing instead to keep it and use that to give themselves a bit of a cushion and to make a bit of a profit to cover those great big losses.
The price cut does however co-incide with the Prime Minsters’s call last week for the oil companies to cut the price of fuel. It seems that someone is still keeping a close eye on them.
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