Views

We live in a period of unusually violent and unexpected change, with not just economic uncertainty but collapse of institutions, environmental challenges etc.

I know people say this all the time including clever commentators, of whom, forgetting the adjectives, I am no doubt just one.

However, the recession has changed and in my judgment will continue for a long time to change things more rapidly and unexpectedly. We are down a deep and lasting economic hole and not all the bad news has come out yet (I believe). Our customers are being hurt but alas their children and even their children’s children will also be hurt. It sounds apocalyptic but if you don’t believe me just look at the UK or US global projections of growth – and tax liability – or read Professor Lovelock’s latest book on the threat of Gaia. Everyone takes this guy very seriously.

What does this mean ?

New winners, some of whom were playing ‘lost in the forest’ yesterday. US Wal-Mart one great example. Lidl a second.

Some quite surprising upmarket winners eg Waitrose, and Morrisons’ Safeway stores which are doing VERY well.

Some of the heavy hitters may just be overstretching themselves and are beginning to hit some buffers – even Tesco may be somewhat constrained as a result of over extension to new markets at a time when it’s hard to generate funds.

It also means

Consumers may make quite radical changes to their behaviour. “I will cut costs hard.” “I won’t buy these categories.” “We won’t go out to these expensive places.” “That car’s not going to happen.” Etc etc…

Where I think they will not economise (much) is with their children; health; education; some travel; the environment (a true fear around now).

Which brings to me to a final point I think is important

Shopper engagement, being part of a community, is probably a more important aspiration now than at any time in the last thirty years. For shoppers, this means that locality may play a greater part in people’s lives because they really want/need it to.

Of course costs have to be managed but travel costs esp. getting in the car will be minimised. Look for changes here. I would call it ‘making the various bits of my life mean more, joining up the relationships, integrating better.’ Supermarkets have become a very hard-edged, money saving experience. There ain’t much pleasure. Nobody even talks to you.

Economists may not like or rate this much, but it could become a great deal more real and the financial services meltdown, the fury with bankers, and the collapse of government integrity all assist the progress of this kind of opinion and attitude.