Stop talking Island into recession
Monday 16th February 2009, 3:00PM GMT.
THE chief executive of the Island’s biggest retailer has warned that Jersey could talk itself into a deeper recession than necessary.
Tony O’Neill, who heads the business that owns Checkers, Marks & Spencer, Safeway and Iceland stores, believes that the effects of the recession could be worsened by negative talk.
The chief executive of the Sandpiper CI group, which employs 2,000 people in nearly 50 business locations, has reported an encouraging start for the retail group in 2009. He said that business had been good despite the mood of doom and gloom in many quarters – and the company was actively recruiting staff and had vacancies to fill.
He added that the group planned to open new outlets as well as introduce new brands and ranges during 2009. These include DIY and garden products from Robert Dyas through the Really Useful Store and new Costa Coffee locations.
• Picture: Sandpiper chief executive Tony O’Neill says that business has been good in 2009
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You can’t talk your way into a recession if there is proof that the recession is happening right in front of you!
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Tell you what Tony. Let’s do a deal.
You drop your prices, we’ll stop being so “negative”
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I am so pleased to read Mr Tony O’Neill’s comments of talking ourselves deeper into a recession than is needed. Much talk, via the media, has been focussed on closures of retail busineses in the retail sector in St. Helier.On my simple research virtually all closures were to do with bad business operations ie Woolworths and they would have closed anyway or other businesses were trying to trade in markets that had changed to alternative products. Without discussing all the defunct trader’s difficulties, it doesn’t take much brain power to see most, if not all, were trying to trade ‘ice-cream to the Inuit’ to put it politely. Evidence can be seen that traders that give the customer what it wants will survive, albeit leanly, during the downturn. Time to be very, very positive and not allow negative viewpoints to prevail.
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Tony O’Neill is right. Where I work is busy and may it continue.
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Sarah
Of course you can. All it takes is a few negatively inflated media headlines and people think twice about spending. This becomes a vicious circle in that the less people spend the worse the economy actually gets causing more headlines causing people to spend even less. This is the first recession in the 24 hour news world and I for one reckon the media are responsible for some of the real downturn.
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Absolutely agree. Although we are in recession officially, the media can (and does in my opinion) make matters worse
The facts are that a fair majority of people are not worse off than this time last year. Wages are the same, mortgages have dropped significantly, yes we have GST and more taxes, but at the moment we are all thinking twice about spending as the media are telling us it’s the right thing to do and being frugal is fashionable
We must be careful, and not frivilous, but the best thing we can do is spend our way out of recession
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why don’t you charge the same prices as your other shops in the bath st.shop tony?15% dearer than your st.brelade & lonville shops,is it because you think town people have more money?or is it fair game to rip us townies off?are you trying to copy tesco,s calling certain shops “expres”if so I have news for you.tesco express in uk only put 1 or 2 pence more than their supermarkets as they are open till about 10 at night,if like you the tried to charge 15%more no-one would use them as i don,t
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Wishful thinking with the type of daily headlines we are getting now.
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i am from south africa and work at a hotel. i work with thousands of people from europe and most of them does not believe the media is busy pulling the situation out of hand, and that the recession is a reality they have to overcome or prevent from turning into a disaster. unfortunately, for every ten guests i ask a credit card, i get ten credit cards!! thus meaning, playing with money that does not exist!! i also suggest that your authorities and local businesses take effort in to providing training for jobs you guys can do yourself instead of allowing people from other countries in your space. i hope you all spend wisely and i pray for your well being.
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Given the fact that quite a few people have been spending a lot too much over the last decade or so I would have thought that cutting expenditure to pay off existing debts or even to save some money would be a logical step for them to take.
The fact is that islanders have got used to an escalator of continually rising wages and a fat bonus at the end of the year for most finance workers.
Maybe those conditions will reappear in a few years time but with 20 means 20 and a possible rise in GST I would describe saving as an attractive proposition at the moment. Interest rates might be low but prices might actually start to fall in the short term so a hundred pouds saved today may be worth more tomorrow.
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I thought positively and shopped somewhere else
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Quite agree Tony! whilst most sensible people acknowledge the economic downturn, the media especially in the Uk certainly hype it up eg Robert Peston and most journos with political capital to gain.
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I am aware of quite a few redundancies in the finance sector that have had no publicity and because if three months garden leave etc will not impact our economy till April or so.
The full impact of this recession has not been felt yet we are right to be cautious.
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A chief executives view of good business is totaly different from the staffs. As we see from the finance industry in london and elsewhere drop in profits or even a loss still means big bonus’s for the people at the top.
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maybe people are looking more at what they spend these days,the consumer council said food had gone up by 14%, so add the hike in electricity .
(edf said on sky news they will cut by 12%, so where’s our price cut)plus the other bills and living, is it any wonder that people are being carefull,many peoples wages have not kept up with inflation in the cat and mouse game of price up wages up , and its always the wages lagging i find.
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Don’t think even Jersey can spin its way out of this one.
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Hi Tony you would say that woudn’t you!! I agree with the comment bring down your prices, having just returned from the UK and compared prices
I for one buy every thing I can off Island due to the rip off culture we have in Jersey
If Tony really wants to help the consumer build there confidence up he can support calls for a new low cost Supermarket
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Tony.
Drop your prices by 25%.
Then let’s talk.
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The recession is here. It is going to get a lot worse.
What got us into this mess was a collective failure of financial institutions and government to see things objectively.
Of course retailers, estate agents etc would like the public to bury their heads in the sand and pretend that there’s nothing seriously wrong.
I’m sorry but I don’t believe them. The facts speak for themselves.
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The reality is that no matter how much you ignore the fact that there isn’t a problem, it will not go away. This morning on the news they are talking of de-flation for the first time in 49 years. Now to say that people are talking us into recession when the figures for unemployment, mortgage agreements and interest rates are all over the press is very wishful thinking. Jersey is still escaping the worst though for now.
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I have “put off” 2 large spend (for me )projects this year solely on the strength of the doom and gloom I am receiving from the media.
This money is in my deposit account earning very little.
Until I am sure I will not need this money as a rainy day fund (redundancy etc), that’s where it will stay.
So yes I am contributing to the recession, But I am looking after my family and that comes first.
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Notwithstanding the warnings to my wife about tightening our belts, she seems intent to stimulate the economy single handedly.
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Why doesn’t Mr O’Neill reduce the prices in his stores that is what would help those of us suffering from this recession.
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Tell that to the people who have lost their jobs!
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All the people who asked Tony to cut his prices could they please ask his staff to cut their salaries and his landlords to cut their rents.
The shipping company can also drop their prices and salaries. In fact we can all cut our salaries, pay less rent and reduce our prices and keep our money in the low interest account. I just talked you into a recession.
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It would be useful for the JEP to look at recruitment agencies and see how many jobs (and perhaps of what kind) they still have “open” on their books. This would provide a counterbalance. It could be followed by checking with highlands to see what re-training in these areas was available.
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We are entering into a recession which could well become a full blown depression. These are the facts not idle chatter. Anyone who thinks Jersey is immune must be living by a different set of rules.
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The arguments from Sandpiper are really pointless. We have to eat, drink (not just alchohol) and clean our houses & clothes. We can choose not to eat certain things that cost more, but we have no real choice at all as to where we do it. In Jersey, it’s virtually heads or tails…Co-op or Safeway/Checkers and that is it. If our Economic Development ministry would allow in some competition, then Sandpiper would see a reduction in their figures that would make them realign their prices straight away.
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Nothing wrong with a bit of positive thinking at a time like this but if your business’s are faring well then your going to be feeling like luck is on your side.
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IMF have already stated that “advanced” economies are in depression as have a number of economists at the main investment banks etc. As I undertsnad it that is a prolonged severe depression lasting 5 to 15 years as opposed to standard recessions which last 18 months.
We have an economy more dependant on the finance industry than anywhere else – and it is the finance industry that will be devastated more than any other business. We also have a housing bubble greater than any other country in the western world. Jersey is totally screwed. Time for you all to put in to effect Plan B.
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AI
Why is Jersey or anywhere else for that matter ‘totally screwed’? You have to remember that we have had 10 years of growth at a rate some may have predicted was only sustainable over 3 or 4 years max. Any reduction in growth is netting off unrealistic increases over the last 3-4 years. Look at the rate food/oil/property/metal was rising over the last 3 or 4 years – it was ridiculous and unsustainable. If anything this ‘slow down’ is the lesser of 2 evils.
The fact is the UK’s GDP is expected to fall by 2 or 3% max over the next year. Compare that to the Great Depression (which everyone loves to compare this to) where the US saw an average drop of about 10% over 3 years. I’m not saying all is well – there will and have been job losses but you have to remember that far more people are in employment now than at the last recession. How many additional jobs had been created on the back of this growth?
How much of the slow down is simply the market economy correcting itself and how much is ‘real’ decline? Finally – those that forecast this doom and gloom are the exact same bunch who failed to rpedict the credit crunch in the first place.
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The next twelve months will prove very interesting and we can all look back and see who was correct in their assumptions.
Personally I do think we are in a bit of a bubble at the moment and by the end of the year there will be more than a few struggling – many of whom have lived above their means.
The one good thing with the current economic climate is that our children will grow up with an old-fashioned and more pertinent financial culture, pay as you go – not pay as you want!!
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If this turns out to be as bad if not worse than 1929 then I think it is safe to say Jersey will be hit hard and there will be severe consequences for everyone over here. Add to this the tax issue which is being looked at closer and closer and Jersey could face something it hasn’t seen in years mass unemployment with many leaving the island to find work elsewhere.
As Jersey is now a one legged economy it doesn’t take a rocket scientist to tell you that a broken leg will mean the end of things as we have known it for 40-50 years. I myself believe we are at the end of an era with the shrinking and even withdrawl of finance as we know it. One thing is for sure things can’t carry on as they are, problems are already surfacing both locally and internationally and they aren’t going to go away even if people wished they would.
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Dear Tony
one who has popped over from the UK and thinks he knows all about Island life. Jersey people don’t want cheap Nisa they want value for money.I used to shop with you and could get all I needed under one roof but now find I can only get a fraction because you tried to cheapen it all with Nisa value. The only one making money is you at the moment you can’t force the islanders to buying what you think we want at the over priced charges you are. Bringing in staff from the mainland is not doing this island any favours either.
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Joker I agree that recent growth rates are likely unsustainable in the long run. You mention netting off growth. I fully expect house prices to crash dramatically as they currently bear no relationship whatsoever to salaries. In the UK average prices are now down to 5 or so times average salary I believe and predicted to fall another 15% or more. The long term relationship is around 3.5 times salary in the UK. In Jersey it is currently twelve times average salary and so you don’t need to be an economist to see that a substantial correction will inevitably happen. This is in general terms a good thing as a whole generation of workers are currently condemned to extortionate rented accommodation and the only people who really benefit from ever rising prices are those entering retirement who can cash in their chips and downsize. That will all however be cold comfort for anyone who has bought property in the last three years with a large mortgage who will face the very real danger of going in to negative equity.
Looking at the wider context virtually every financial institution in the world has now announced proposals to reduce it’s workforce. From what I can see from the FT etc most are aiming for around about a 10% reduction over the next year or so. That’s why I say Jersey more than anywhere is going to be hit. It’s housing bubble is bigger than any place I have seen referred to. It is massively dependant on the finance industry for employment and for state revenues. There is also a ripple effect as the employment of finance workers creates jobs across the wider real economy. Mass unemployment, substantial housing crash, negative equity, significant house repossessions/ personal desastres, plummeting states revenue. If as predicted by the IMF and others the UK is going to suffer the worst recession of any of the advance economies due to the size of its housing bubble and reliance on the finance industry then you can guarantee that Jersey will fare even worse. All that without considering an Armageddon scenario for Jersey of any of the EU/US/UK getting there acts together and cracking down on tax havens.
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