Simon Jenkins got one thing right last week. His complaint about a coalition of economists, historians, philosophers, bishops and Marxists “talking down confidence” displayed excellent timing.
Last week, Sainsbury, Co-op, New Look, J.D. Sports and Debenhams all reported Q4 revenues up on last year. The Christmas trading period didn’t look so bad in retrospect.
And the retailers who have gone bust already? As Robin Goad of Hitwise noted in New Media Age last week, what they shared was the lack of a “good web presence”.
Not that doing well online would have saved any of them, necessarily. It’s more that having your act together online is a fairly reliable indicator of the presence of good management. The optimistic point here is that we’ve yet to see a deserving case go to the wall.
This week, we’ve had Tesco reporting a 2.5% increase in like-for-like sales during Q4. The FTSE-100 is significantly up on December’s lows.
The bad news? This is nothing more than a dead cat bounce, supported by one final last hurrah from the sainted British consumer.
Unemployment is still rising. Credit is still hard to access. Given heavy discounting, it remains to be seen how much pre-Christmas profit retailers generated from their increased revenues.
And look at yesterday’s quarterly Bellwether Survey of marketing folk published by the Institute of Practitioners in Advertising. The survey tells us that only 7% of marketing professionals at UK-based and multinational companies increased their marketing spend in the last quarter of 2008.
Are these hard-headed marketers cutting spend on the say-so of a few alarmist commentators?
I don’t think so. What really concerns me is the IPA’s startling suggestion that ad spend on “main media” (television and print) fell by one-third during Q4. This, we’re told, was part of a “sharp acceleration in the overall rate of decline” in marketing spend.
The IPA didn’t mention a fall fo 30% in its press release. But Tim Bradshaw at the FT asked the question -– and got his answer.
Last summer, I worried about sounding alarmist when I predicted successive declines of 20% in ad revenues at Trinity Mirror and Johnston Press during 2008 and 2009.
I guess the IPA’s findings reveal me as an optimist in disguise. Perhaps — who knows? –- it might even keep me from being identified as a member of the Axis Of Gloom.