20 September 2008

It's crunch time for the credit crunch

I have finally lost all patience with those who think it is ‘news’ to bring us a fresh take on a subject we are all only too aware of.

It seems almost every day some bright spark comes on BBC Radio 4’s Today programme (one of the main sources of news in the Morrison household) to announce that some people are in a spot of bother over the decline in house values and that property sales are a bit slow at the moment.

Although this information is hardly new, it is presented as newsworthy just because someone with far too much time on their hands has found a different way of adding up the same figures.

Should we really be that surprised if the same result is arrived at? It’s like looking at a calendar and then checking the date in your diary!

Okay, we get it. The gravy train of ready credit has come off the rails. Sometimes because people who should never have been lent so much money in the first place have, surprise, surprise, defaulted on payment.

And sometimes because a Jack the lad, or a Jill the lass, took a punt on property prices continuing to increase and then came unstuck because the punt sank.

That’s how we got to where we are today, what we going to do about it?

Well, we could all moan about the demise of the good old days. Alternatively, we could look at ways to make the best of the cards we have got in our hands.

The market is polarising and the old segments of entry, middle and upper are perhaps no longer valid, or if they are, the boundaries have changed.

At 100% Design on Thursday I was chatting to a kitchen company person who quite cheerfully admitted he was over double digits down on order numbers, but his turnover and profit were both up.

All he had lost was all the low value orders that tied his team up just as much as better value business – and his better value business had not just held firm, it had increased compared with this time last year.

On the other side of the park was Ideal Standard with its Concept range offering genuinely affordable design. It will not threaten the company’s Sottini ranges, but it will bring a stylish, modern bathroom within the reach of many people. It will give them the confidence they need to improve their home, and give Ideal Standard's retailers and merchants the tools they need for today's market.

Almost everybody who has been living in his or her home for around eight years has seen its value double. The few percentage points the property lost in the last year does not concern them if they have no plans to move.

And if they have no plans to move, they are the customers of tomorrow. Of course, they will be a little nervous at the moment. They will undoubtedly drive a hard bargain, will prefer to buy brands they know, and will be much more aware of good design and design values than used to be the case.

This is the customer you will be dealing with, so get used to it.

The good news is that there are a lot of them – even if some sections of the media would have you believe otherwise.

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