No one is unaware that the world is in the grips of a global recession and with retail sector giants like Woolworths in deep trouble, it is no wonder that everyone is concerned. The future prospects are not good for many retail companies 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 banking customers are now considered to be high risk, which can cause huge problems for small shops as they rely on the banks for their cash flow. This means that many of these organisations have their money tied up in stock and this means they either have no money until they sell the stock or they have to reduce the amount of stock from suppliers.
A solution to the current global financial crisis is to try and persuade consumers to spend more and this is why many businesses are now trying to come up with business growth plans, utilising marketing like telemarketing and public relations, in order to survive. Lots of 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 at bay. The issue with this is that lots of consumers will now wait until prices have lowered right down, rather than spending money now when the businesses need it. This means that shoppers tend to only spend money on products that they believe that they have to have.
It would seem that consumers are becoming more sensible with their money. A recent press release said that Manchester restaurants and takeaways were still performing well and that the reason for this was because consumers were still ordering takeaway deliveries but were going for the less expensive option. Instead of ordering food from big brand names like Dominos they are opting to go to local Manchester restaurants as these cost around 20% less.
It would seem that shoppers are still happy to make purchases but they will only spend money on things that they can rationalise, this will mean that they will spend money on bills, food and health products as well as gifts for certain times of year. Shoppers will also still spend their cash 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 wanted. People are also prepared to spend out on presents for weddings especially when it comes to jewellery like Mens Cufflinks.
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