It’s an ill wind that blows no one any good, and even in recessionary times there are businesses able to profit as a direct result of the economic downturn.
Stack-em-high and sell-em-cheap supermarket chains such as Netto, Lidl and Aldi have already welcomed a new generation of middle class shoppers who, until recently, would have deemed it the most tremendous loss of face to have conducted the weekly grocery shop anywhere but the rarefied heights of Waitrose or Marks and Spencer.
But needs must, and as unemployment grows and the hard times start to bite we shall begin to see consumers return to past habits. Pawnbrokers’ stores are something of a growth industry, as is what was once known as catalogue shopping.
The announcement that BrightHouse, a credit-based retail chain selling electrical goods on easy terms over extended repayment periods, is to open ten new stores in Birmingham will probably be greeted with enthusiasm by individuals and families whose applications for credit would be rejected by most other companies. In fact, BrightHouse and its customers represent, to all intents and purposes, a mini-version of the banking sub-prime lending crisis which began in America and led directly to the credit crunch.
BrightHouse founder Leo McKee, a former Woolworth managing director, doesn’t see it that way of course. He regards himself as a white knight riding to the rescue of low-income families who could never otherwise afford to buy “aspirational” goods such as plasma televisions, although he does not, of course, dwell on the hefty rates of interest imposed on what are basically extended hire-purchase agreements.
Mr McKee is keen to talk up what he sees as the community aspect of his venture, adding that “poorer people still have values”, and stressing that customers spending more than £24 a week are likely to be questioned about their circumstances and ability to re-pay the loan. Customers can even take payment holidays and return goods without incurring penalties if times get tough.
His comments are only partly re-assuring. The issue remains, as charities Save the Children and Family Welfare have pointed out, that the lure of buying must-have goods on the never-never, and paying substantially more than would be the case if purchases were made in a conventional manner, could throw vulnerable people into a spiral of financial over-commitment.
BrightHouse is a rare example of growth in a difficult climate, but is this a development that Birmingham really needs?