So here we go again, back to the polls. This time it seems like the UK is reluctantly being dragged to vote, less than one year since the EU Referendum which split the country down the middle, potentially further widening the divide in the nation.
The cost of another election is expected to be high, with the recent EU referendum having cost the nation over £142m. However, the true cost is to the economy and brands as once again consumers hold back on spending and making those ‘considered’ purchase.
In 2015 before the last General Election, Deloitte recorded that 40 per cent of consumers were worried on the impact of the upcoming election to their finances, with 19 per cent postponing major purchases until after election. Less than two years on, can brands, retail and the economy really survive a poor timed and considered general election? I suspect not, especially when you factor in the impact one year later that the EU referendum had and continues to have on the economy.
Immediately after the nation decided to Brexit, consumer confidence plummeted to 9 and then to 12 in July. It has yet to stabilise, sitting at 6 presently. Therefore, don’t believe the hype: the pound has yet to recover against the Euro and Dollar making everything we import just that bit more expensive. This is combined with no real increase in wages as the cost of living increases to 2.3 per cent in the wake of austerity, and a possibly demonstrating the hard Brexit reality ahead based on the significant cost of living increase experienced over the last 2 years.
The house market is tanking, we aren’t earning interests on our savings, we’re borrowing more, the cost of living is increasing and we’re again entering a period of instability and uncertainty with the prospect of a change in government, further confusion and the inevitable Brexit. Figures released 21 April 2017 from the Office of National Statistics (ONS) showed that there was a 1.4 per cent decline in retail sales for the first three months of the year, the first such quarterly decline since 2013. It’s not surprising considering that average store prices were up 3.3 per cent compared to the same period last year.
We laugh at FMCG goods becoming smaller such as Toblerone bars getting wider apart, but jokes aside, the stark reality is that brands need to be honest with consumers. They need to offer value for money if they wish to retain trust and not lose share to discount retailer’s lookalike brands, or through brand apathy.
In the considered categories such as technology, consumer electronics, luxury and the indulgence sectors, the need to take heed of that recorded 19 per cent at the last General Election is clear. This group will undoubtedly resurface, putting off those considered purchases, possibly increasing in numbers as the economy worsens, making any price increase futile in recovering lost profit as brands sell less. In the same manner, retailers need to work with brands cooperatively and responsibly to maintain a sustainable channel that helps build both confidence and trust amongst consumers, supporting a stable economy.
Brands can make a difference and contribute through demonstrating the lighter side of life in their marketing approach. Additionally, brands may help by bolstering the economy by giving back in fair pricing, through charitable causes, and spending through the line to protect support sector jobs. In order to survive and drive the economy forward, less talk about profit and more demonstrable love by understanding and empathising with consumers can only help brands, categories, retail and the overall economy to bloom or at least stabilise during political uncertainty locally and globally.