69 brands with a lower price point, which will capture a share of the purse as consumers drop their spending. And while using the upcoming Government logo might be positive, it will not really help those in society that don’t buy brands. With this example, there are so many other things to consider. Supermarkets make a significant amount of money selling shelf space/ placement, so how will that change if brands are not spending anything on marketing or promotions? And it could be argued that, say, two-for-one promotions are lifesavers at the minute. So, again, I applaud the positive thinking, and whatever can be done to support those with the greatest need has to be considered, but I’m uncertain whether this – and similar ideas – are workable either in the short or long term. In the recent news, even the low-cost retailers such as Poundland have seen a change in buying behaviours and spend per shop. Hence, once again, it’s the most vulnerable in society that would not really benefit from the suggested policies. Additionally, leaders are coping with internal pressures to mitigate costs. The overriding question is: how much of the inflationary cost drivers have already been passed on to the consumer? Managing the future from a cost perspective is a perilous task just now, with so many unknowns. Even businesses with the best will in the world don’t want to reduce prices for the consumer only to find they can’t operate in a few months due to other cost impacts. And even without marketing, will customers move to other brands or businesses as they shift down? Tough questions to answer A customer-centric approach is vital. But there are so many questions that cannot be answered to make firm plans for cost reductions. Are lead times naturally going to come back down and product availability start to increase, and when will inflation decrease and customer demand rise? At the end of next year? If the events since the start of 2020 have taught us anything, it is to expect the unexpected. The critical point is that I worry people’s ability to model the impact of changing the product portfolio and marketing plan alongside rapidly evolving consumer trends and buying behaviours is incredibly challenging. Of course, business leaders would love greater certainty and control, and for some normality to return. But as war rages in Ukraine and with coronavirus still not kept at bay, we need to continue to invest in innovation today so that tomorrow those hit hardest by the cost-of-living crisis will not suffer more. Ultimately, the appointment of the Cost of Living Business Tsar and the ideas about reducing costs emphasises the need for leaders to have an Integrated Business Planning process to manage their company, now and in the coming months and years. You also wonder how much of a role central Government will play as surely a cut in VAT on food would provide a benefit across the board. VISION & STRATEGY
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