Changing supermarket use highlights weak consumer demand

Sir Mervyn King’s mandatory letter to account for the failure to keep inflation down mentioned factors such as high commodity prices and the rise in VAT. However, recent figures relating to the retail sector arguably shed almost as much light on the British economy as the letter by the Governor of the Bank of England. They indicate that the typical British consumer is responding to financial pressure in a way which makes things awkward for many businesses.


Asda has admitted that the number of its visits to its chain of stores fell by 1.2 per cent in the quarter to June. They suggested that people were reluctant to spend so much on petrol. Market researchers have shown that discount supermarkets such as Aldi have been performing well as consumers have adapted to having less spending power. While Asda and the other three major supermarkets in the UK have the power to adjust to new consumer behaviour, firms which are much smaller may not be so fortunate.


At Cooper Matthews we know that companies are not generally passive victims of economic trends. Nonetheless, our experience tells us that firms are often constrained in what they can do. When demand for their goods or services fall, it is not surprising if an enterprise has difficulty in adjusting.


Business debt can accumulate for a diversity of reasons. It may be caused by the fact that a director falls ill for a protracted period, for example. However, coping with business debt is much more difficult when the economic climate is not in a supportive phase. It is critical to recognise that being in debt should have no stigma attached to it.


When debts are hard to address, it is important not to soldier on without outside help. Specialist business debt services can help a struggling company respond to a tricky situation in the most appropriate way. This can mean that worst case scenarios are avoided.

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