As the topic of recession continues to gain ground in the media,
it’s good to see some positive trends. Below we highlight some
companies that show signs of bucking the trend with strong sales
results, or committing to significant business expansion.
Retail: Consumer confidence in the UK high street has undoubtedly weakened, but some brands are shining. No-frills fashion brand Primark has defied weakening high street sales, with an increase in revenues of 25% to £899 million for the first quarter of 2008. Although its credentials have taken a beating on the ethical front, price-conscious consumers are undoubtedly attracted to this brand. House of Fraser, the UK department store has just embarked on a major expansion programme to move the brand upmarket. It’s new store in Belfast is now its largest and is part of some £60m being ploughed into stores.
In line with the general positive trend twoards internet advertising, e-Commerce is expected to remain healthy. According to a recent global survey conducted by The Nielsen Company, over 85 percent of the world’s online population has used the Internet to make a purchase, up 40 percent from two years ago. In the US, Forrester Research reports that online retail sales (excluding travel) will rise 17% in 2008 to $204bn. Tesco's latest results show that it's online retail business is one of its strongest areas. Internet sales now contribute 4.2% of Tesco's group profits and 3.1% of sales. Profits from Tesco's online foods sales were up almost 50% on sales that grew 31% and a customer base of more than one million active users that was up 20%.
Travel & tourism: In travel and tourism, although the World Travel and Tourism Council recently cut its projections for global tourism growth to 3% for 2008, with $8.4 billion expected in revenues, that is not deterring some. Sheraton has announced plans for its largest expansion in North America, where some £2bn will be spent on new hotels.
There is also still much confidence in business travel. A recent Barclaycard business survey with 3,000 business travellers, found 33% plan to travel more in 2008 than they did in 2007. Over three-quarters anticipate travelling the same amount or more due to general business or overseas expansion. However, economy travel will become more common due to cost-consciousness and the ongoing shift towards low-cost airlines. The annual survey saw EasyJet’s share increase from 7% to 15% and Ryanair from 3% to 8% year on year. BA remains the number choice with 28% of survey respondents.
Sources: Travelmole, Barclaycard business travel survey, Internet Retailing
