As we veer towards winter, it feels like there isn’t a great deal to be cheerful about - banks are in crisis, businesses are facing bankruptcy and we’re all feeling the pressure financially.
Nothing is ever all bad though – whilst we hear a fresh financial horror story each day, there have been some who have benefited from the current economic climate.
This may or may not make anybody feel better, but I think it’s about time we had a positive credit crunch story.
Comfort eating
The rise in food, heating and energy costs have made cooking at home more expensive and people are seeking a cheap solution. This is good news for fast food retailers who are seeing a surge of business at the moment. McDonalds is struggling to cope with demand as an additional 2 million customers flock to them in seek of comfort and refuge every month. Consequently, they are one of the few retailers extensively recruiting at the moment with a reported 4,000 jobs being created around Britain. This is good news in other ways too…perhaps this all means that the insane pursuit of a size zero is on the way out. Hurrah. Bring on the Big Macs.
Staying in is the new going out
On a similar note, takeaway outlets are also seeing a huge rise in custom. It would seem that people are thinking twice about eating out in restaurants and are opting for a night in to save the pennies. That’s been good news for pizza delivery companies like Domino’s. Business is also booming for online DVD rental company lovefilm.com - to round off the perfect night in, people are hiring a DVD to go with their takeaway rather than spending more than double on cinema tickets. I don't think there is anything to be feeling deprived about here. I've just described one of my favourite kinds of Friday night.
The Lidl effect
This isn’t really news as it’s been all over the press but it stands to reason that consumers are downgrading their weekly food shop. This has been terrific news for bargain retailers such as Lidl and Aldi.
Poundland, another high street retailer that prices all of its goods at a £1 flat rate has also met with success this year. I can’t really think about these kinds of shops without bringing to mind the naughty people who go into such establishments just to torment the poor staff by picking up various bits of merchandise and asking how much in turn each individual item costs. Hours of fun. However, the people of Poundland are the ones laughing now, having seen profits to March 2008 up 122%. ( I'm delighted to see that Poundland are also online now..may find myself some bargains later)
The Environment
It’s not just companies for those on a budget that are triumphant.
The environment may just be onto a winning streak too…With all that expensive petrol, people have been driving less and also driving slower to save petrol (cut your average motorway speed by 10mph and see for yourself). All those ineffectual political ideas on how to change behaviour and get people out of their cars and on to public transport have been superseded by the jump in the price of the black stuff.
First time house buyers
So that’s companies and the environment. But what about people? Well, they aren’t all worse off either. Think about those who want a house but haven’t bought one yet. The bubble in the prices of homes first time buyers want to buy has burst, and if they are lucky enough to get a mortgage (lenders almost, almost reduced total mortgage lending in August), when things calm down and markets bottom out they’ll be better off than they were back in the heady days of early summer 2007.
There’s actually more than a single blog’s worth of material for this subject…if you’re very lucky I may revisit the subject in a couple of weeks.
In the mean time I hope I’ve cheered everyone up a bit.
If not, please feel free to give me some ideas...
It's certainly true to say that it's not all doom and gloom - my personal prediction is that eBay will do very well...
However, not so much the credit crunch, but the coming recession will see a lot of businesses closing and jobs being lost
Posted by: The Credit Cruncher | November 02, 2008 at 12:22 AM