Hard times for retailers: how strong brands can help

 Peter Walshe, Millward Brown

Gloom is beginning to pervade retail commentators on both sides of the Atlantic .

The dreaded ‘R’ word - recession - hovers over retail brands like the sword of Damocles, and every financial update from a publicly-quoted major chain such as a Wal-Mart, Tesco or Gap is scoured for evidence of an underlying trend. If markets detect weakness, the retailer’s share price inevitably suffers. Too often, however, analysts ignore the “B” word - namely, brand. Yet years of research show that brand strength can help companies in their recovery from recession.

Looking at Millward Brown brand data from client surveys over the last 20 years (which is backed up by the IPA Effectiveness Awards papers to which the following brands link), I can see that during the UK recession of 1991/1992 the Renault Clio was launched, and exceeded its first year sales objectives. Andrex toilet tissue held its volume share at over 30 percent, despite its premium positioning. Gold Blend increased market share and Haagen-Dazs’ sales figures grew almost 400 percent from 1990 - 1991. With proper management, brands - even premium brands - can thrive in a recession. Recessions can present opportunities for the focused marketer.