Customer Trends During The Credit Crunch
Wednesday, December 24th, 2008 | Places
Everyone is aware that we are in the grips of a global recession and with major retail companies like Woolworths going under, it is no wonder that most people are concerned. The prospects are not good for many retail businesses as they are in a situation where the banks that were once happy to let businesses borrow money have turned round and said no. This is because retail business customers are now considered a high risk, which can cause huge problems for small shops as they rely on the banks for their cash flow. This means that most of these companies have their cash tied up in stock and this means they either have to drop their prices in order to sell the stock quickly or cancel undelivered orders from their suppliers.
A A way to fix the current economic climate is to try and get consumers to spend more and this is why many businesses are now trying to come up with a business growth plan in order to survive recession and make their business stronger for the future. Many businesses are now selling off a lot of their stock at reduced rates so that they can free up some of their funds in order to pay off important bills and to keep their creditors happy. The issue with this is that lots of consumers will now wait until prices have lowered right down, rather than buying goods now when the businesses need it. This means that shoppers tend to only spend money on necessary items and products that they require everyday.
It would seem that consumers are becoming more sensible with their cash. A recent poll said that Manchester restaurants and takeaways were still performing well and that the reason for this was because consumers are still ordering takeaway deliveries but were going for the cheaper option. Instead of ordering food from big household names such as Dominos they are opting to go to local Manchester restaurants because these cost around 20% less.
It seems that consumers are still happy to make purchases but they will only spend money on things that they can rationalise, this means that they will spend money on bills, food and health products as well as gifts at certain times of year. Consumers will also still spend money on special occasions like weddings because these are often a once in a lifetime experience and are you going to be the man that denies his daughter the castle wedding she has always dreamed of. Consumers are also prepared to spend money on presents for weddings especially when it comes to jewellery such as mens and ladies cufflinks.