The firms the credit crunch has favoured
The news about the worsening economy seems relentless and yet it is not all bad.
As the credit crunch celebrates its first birthday, it’s clear that some companies are benefiting from a trend towards trading down.
Consumers might be feeling the the pinch but budget options are becoming more appealing and companies such as Dominos, Travelodge and Aldi are thriving.
In the tourism industry, mainstream airlines are losing passengers to budget rivals. Ryanair reported a 19 per cent increase in passengers in July, while BA’s passenger load was 3 per cent down for the same month.
Not everyone is going abroad. Budget hotel Travelodge found that 30 per cent of people they surveyed had cancelled foreign travel plans. The company has seen double-digit growth in destinations such as Cornwall, Isle of Wight and Devon.
Camping holidays are also on the increase; Haven, the holiday park owners, have seen a 30 per cent upsurge in bookings.
So the great British seaside is experiencing a revival. The challenge for the industry is to invest in long-forgotten seaside towns to keep the appeal when the economy recovers.
Consumers demand value at the supermarket as well. Aldi has seen sales growth of 22 per cent this year and Lidl 14 per cent. Both are well ahead of the “established” supermarket brands. Aldi is seizing the opportunity to grow its market share by spending £1.5bn on 400 more stores over the next five years.
But what of staying in being the new going out? It would appear that a night in with a DVD, a pizza and good cup of coffee is enough to keep us entertained.
DVD prices are lower than ever, which is good news for film buffs who are cutting back on the cost of entertainment. The British Video Association reports that DVD sales are up 3.3 per cent this year – heartening for an industry badly affected by illegal downloading.
Pizza delivery company Dominos saw a 19.3 per cent increase in new customers in the first half of the year.
Meanwhile, caffeine addicts are downgrading their spending by brewing coffee at home. Whittard of Chelsea has announced a 15 per cent increase in sales of coffee and an 11 per cent increase in coffee-making equipment sales.
Fancy an early night? Someone benefits from that too. Sales of condoms at Superdrug are up 15 per cent year on year and lubricants are selling faster than ever at 5,000 packs per week. Is the economy having an aphrodisiac effect, or are people nervous about having another mouth to feed?
Either way, it’s good to know that there are still things to put a smile on your face.