In slumping British economy, some businesses thrive

A cycle shop, satellite TV, and Subway and other fast-food outlets are expanding. Why?

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    Jan Vermooten of Evans Cycles in Kingston, England, has expanded his shop. His sales are booming as more Britons seek to cut commuter costs.
    Brian Aldrich/Special to The Christian Science Monitor
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The empty shop windows and boarded up facades tell a familiar tale: Businesses are failing in this once perky corner of southwest London. The downturn is biting.

But not at Evans Cycles. Here, among a nest of bikes of all species, Jan Vermooten is having a “good” recession. The bike store manager describes a story of growth that would make the cafe owners next door salivate – at least it would if the cafe hadn’t gone bust and sold out to him.

“The store has doubled in size,” he says, standing among racks of bike wear and $100 helmets. “Sales have increased and we’re doing really well.”

As Mr. Vermooten sees it, more people are commuting on bicycles to cut costs. The environmental message is also getting through. “We’re actually doing better this year than last year,” he says, when oil prices peaked.

It’s a rare success story amid a bleak overall picture. Tens of thousands of Britons have lost their jobs this year, sending the unemployment rate to 6.5 percent, surging above 2 million for the first time in more than a decade. Banks are teetering, car companies have stalled, real estate agents are handing in the keys. And economists see no recovery until well into next year.

But not everything has seized up. According to recent company results (and an informal Monitor survey of two dozen Britons) some small corners of recessionary Britain are thriving – and its not just pawnbrokers and bankruptcy administrators.

Fast-food outlets, domestic amusement parks, discount supermarkets, satellite television providers, building renovators: The list of winners paints a picture of a nation hunting for bargains, tightening belts, and staying home more.

Subway: 600 new outlets

In general, fast-food and take-out purveyors are seeing increased business, while many restaurants suffer. Domino’s Pizza reported sales up 15 percent this year. The sandwich franchise Subway recently announced the opening of 600 new stores, creating 7,000 jobs.

“The real growth is in the fast-food sector and the takeaway pizza market,” says Paul Wootton, editor of Restaurant magazine. “It’s a sure sign that many people are electing to stay in on a Friday or Saturday night rather than going out to eat.” Satellite broadcaster Sky confirmed as much when it said it was hiring another 1,000 people to support sales growth.

Discount stores boom
A recent survey found that 57 percent of people are more conscious of how much they are spending and are making an effort to spend less on groceries.

“We’re definitely more frugal in all areas really, but I’m not going to be overcautious as I think this will just perpetuate the problem,” says Tina Quadrino, whose husband, Chris, was recently put on a part-time work shift. “In supermarkets, I tend to only buy what we need and leave some of those ‘bargains’ alone unless I actually need the item.”

Many analysts say supermarkets will emerge even stronger from the recession: the discount chain Asda recently said it was creating 7,000 new jobs and opening 14 stores. Supermarket rivals Sainsbury and Morrison both announced bumper profits recently. Sainsbury’s chief executive, Justin King, said there was evidence that more people were shopping in his stores and cooking at home. “We are seeing some significant changes in the mix of products customers are choosing to buy,” he added.

Holiday on the ‘English Riviera’?
Although big-ticket purchases like houses and cars are definitely being postponed, according to marketing professor Jonathan Schroeder, people do not want to give up their vacation, but are prepared to adapt it to leaner times. British amusement park Pontins has announced that it’s hiring this year, and Mr. Schroeder says that the British southwest, which styles itself as the “English Riviera” is preparing for an influx this year of people who otherwise might be holidaying in continental Europe.

“People [here] feel this summer is a great opportunity to reintroduce the wonder of the bucket-and-spade holiday,” Schroeder says.

Upsides to the downturn?
The slump is clearly hitting thousands of families, but there are some silver linings. Mr. Wootton, the editor of Restaurant magazine, says that if you’ve got cash it’s a great time to be a consumer.

Money-saving websites offering discount vouchers are inundated. Even Michelin Guide multistar restaurants are offering value meals to draw customers. Everything from gym memberships to hotel rooms are up for renegotiation.

Another silver lining is less obvious, but can be summed up as “values.” Jeremy Baker, a marketing expert at London Metropolitan University, says for many the new era of austerity is engendering a revolution in values.

“People are finding it surprisingly easy to adjust to our new negative era,” he says. “There was an absurd feeling about the boom. We were chasing after the rich who, we thought, were our betters. It now turns out that they knew nothing. We now don’t want to be like them.”

Jeremy Rix, a personal coach, says he and his family are enjoying redefining what is important. “We’re more careful about spending money and are making sure we get value as a result,” he says. “We’ve sold our second car, won’t be making any major purchases any time soon. I think it puts into perspective what you need versus what you just desire.”

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