Rising VAT, fuel and all round deficit cuts misery have finally hit Joe Public in the pocket.
This may seem a strange statement after what is now three or more years of so-called recession, but I genuinely believe that for some consumers the real recession is only just starting.
Sorry to be the prophet of gloom, but the credit crunch was, after all, a banking crisis that played out in the media. Sure, many people were affected, particularly those unfortunate ones who lost their jobs, but with low interest rates providing a comfort blanket, the vast majority of consumers have not been particularly troubled.
Things are now taking a turn for the worse. Fill up your car with petrol and you suddenly feel the pinch, right here, right now. The AA has reported an upsurge in call outs to customers who have run out of fuel. It appears that filling up with a full tank has gone out of fashion, consumers preferring to top up piecemeal thus avoiding the one-off psychological damage of £80 on their chip and pin. With all round inflation putting further pressure on disposable income, matters can only deteriorate further when – rather than if – the Bank of England puts up interest rates.
With all round inflation putting further pressure on disposable income, matters can oanly deteriorate
So what does this mean for us all in marketing? I am fortunate to manage brands that are best described as everyday staples and we have not seen any real underlying changes in demand. Our challenge is more about making decent money from what we are doing as we battle rising commodity costs and relentless pressure from our retail customers who battle each other to provide the nation with cheaper prices.
As our margins are ever pressured, so are the inevitable calls for the marketing budget to be pruned. At the very least I am forced to hold a good chunk of my spend back in reserve for a rainy day.
Sadly, for my brand team, I predict a tortuous year of “stop/start” marketing spend as we creep towards towards hitting our numbers while doing our best to avoid any form of commitment. We shall be living hand to mouth. Short term pay as you play rather than annual debentures. I apologise in advance to our agency partners for our obsession with the here and now, but at least this way we should be able to settle your bills in full.