With Britain officially in its first recession for 20 years, the media is reporting doom and gloom.  Unemployment is at 1.9million and is predicted to rise to 3.4 million in two years time, house prices have dropped 15.9%, the FTSE is underperforming by a third on last year, and there has been a rise of 50% in the number of small company failures.  One such story that gave me cause for concern, was the reported closure of 52 pubs a week, with some predicting that a quarter of all pubs will close in the next ten years.  Is this the end of the good old British pub?  Well that depends on your definition of good.

Many of the pubs closing, are what you might call ‘Working Mans Pubs’, saw dust on the floor and no doors on the toilets, the owners claim that it’s the recession that is killing them.  The owners of these establishments have missed the swing from an industrial to service society.  People want good service, they expect good food (Gastro-Pubs), and most have some expectations with regards hygiene.  Sure recent moves by the government, the smoking ban and excessive duties, are not helping, and with many people choosing to buy their alchohol from the supermarket and stay at home numbers are dwindling, but people enjoy the social interaction of the pub, a warm welcome and a cold pint (or Scorpion Bowl), could make all the difference.  Its no longer the meeting place for men after work, more families and women are choosing their local for dinner and as a meeting place.  Pubs need to change with the time, they need to move to a hospitality proposition, and create an enjoyable experience for all consumers.

But its not all doom and gloom, Goldman Sachs has reported second quarter profits of $3.5billion, so its back to the big bonuses.  Ford the only one of the big three US carmakers not to go bankrupt, have reported quarterly profits of $2.3 billion.  Mortgage approvals in the UK are at a 15 month high, and there was a 2.9% rise on last year in retail.  Hermes have seen a 12% increase in 2^nd quarter sales of 446.6 million euros, that was probably the sale of one handbag (Lesley!!).  But not all luxury brands are doing so well, I’m sure that Mr. Hayek is dismayed to hear that the Swiss watch industry is facing its steepest drop in global demand in 20 years.  Brands including Rolex, Tag Heuer, are down 29% in the first half of the year.

The recession means good business for some companies, ‘the recession proof’.  Top of mind brands such as Heinz and Colgate, are showing increased sales, even though they have increased prices whilst reducing costs.  Cinema ticket sales in the UK are at a 7 year high, fast food companies such as McDonalds and Dominos are soaring.  As more people choose to stay at home, sales at B&Q, Durex, and online retailers such as Play.com are all on the up.  Shirt manufacturer TM Lewin, and many cobblers are seeing an increase in sales, as people smarten up in an effort to keep their job.

One company Newton Consulting, who specialise in production/ manufacturing efficiencies, have seen revenues increase by 50%.  With the government launching it’s manufacturing strategy with the simple statement ‘that the UK needs a better balanced economy based on a strong and competitive manufacturing’, hopefully there will be more work coming their way, or maybe its just words, but that is another discussion, on another day, on another blog.