City & Corporate: Retailers warned to change tack

Retailers have been warned that 'testosterone-powered PR will not work' as many chains now face communicating slumps in sales.

Top corporate PR professionals spoke to PRWeek amid clear signs that the chaos in the financial markets is spreading to the high street.

This month, M&S reported its worst quarterly sales performance for more than three years and Bhs suffered a four per cent fall in like-for-like sales over the past six weeks.

Meanwhile in September, sports chain JJB reported a major first-half loss.

Corporate insolvency specialist Begbies Traynor warned a further 323 UK retailers could join names such as Miss Sixty and Rosebys in going bust in the new year.

But one senior agency source said: 'Some retailers are using the economy as an excuse because they are totally blaming poor results on the macro environment rather than their ability to adjust to those conditions.'

College Hill managing partner Mark Garraway said: 'Talking up doom and gloom is dangerous when you are making bold and sweeping assumptions without any empirical evidence.

'Comms professionals need to be very careful to talk specifics and not generalities in such ultra-sensitive times,' he added.

During these increasingly difficult economic times firms' approach to comms may have to subtly change, he noted.

'The market is looking for survivors, not winners,' said Garraway. 'Testosterone-powered PR will not work in this environment; communication needs to be about fundamentals and a long-term plan to give a degree of certainty in an uncertain time.'

Andrew Jaques, partner at Hogarth, said: 'At some point in the future things will get better. The companies that recover their share price fastest will be those that set realistic expectations that can be met going forward and those that have communicated effectively to the stock market exactly what they are doing.'

Other PR professionals stressed the importance of communicating honestly and not hiding. Helen Dickinson, head of press and PR at John Lewis, said: 'We need to be as transparent in the bad times as we are in the good times.'

Amid the doom and gloom, a number of household names including Sainsbury's, WHSmith and JD Sports have posted positive trading updates in recent weeks. Observers said this provided a huge opportunity to highlight brand differentiation and to communicate with consumers more positively.

HOW I SEE IT - Nick Murray-Leslie director of financial markets, Chatsworth Communications

It is a function of investor relations to blame macro-economic conditions if your own company is not going to report good earnings, but it is also in the vested interest of retailers to encourage high-street spending. There is a gulf between realists who accept a downturn and those who are trying to drive positive sentiment to boost sales.

Any idiot can make money in a rising market, but the good comms should remain the same regardless of market conditions. Retailers need to get smarter with their money and trim spend while sticking to the principles of good comms.

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