Middle Class MELTDOWN
Once-popular bourgeois brands take a battering as cash-strapped shoppers are forced to trade down
THEY blossomed in the good times as the middle classes splashed out on organic quinoa and trendy woven furniture, and no gin was sipped without an exotic and expensive tonic.
But a clutch of aspirational brands are feeling the sting of recession as household bills rise. With inflation at a 41-year high of 11.1pc, even the country’s Tarquins and Tabithas are feeling the pinch from rising prices – and taking cheeky trips to Aldi.
Made.com went bust last week, scooped up by the more enduring stores giant Next, as customers decided its fire pits and hanging chairs were no longer on trend.
Joules, one-time favourite of the welly-wearing country set, followed suit yesterday.
Other middle- class obsessions, Hotel Chocolat and Fever-Tree, have seen their share prices plummet, battered by rising costs and turbulent global conditions.
Even Home Counties favourite Waitrose, which has been described as the country’s poshest supermarket, is struggling to persuade enough shoppers to buy its wild Alaskan salmon at £34 a kilogram.
Those customers rifling shelves for flax and chia to sprinkle on their porridge may have felt a mild jolt over the chain’s prices in recent months – which are drifting higher than rivals’, according to The Grocer magazine.
A selection of 33 goods bought at Waitrose cost £71.80, versus £58.17 at Asda and £59.91 at Tesco. Lidl and Aldi are £10 cheaper still, a recent survey showed.
Retail experts say the widening gap explains a drop in Waitrose’s share of the grocery market as hard-up shoppers compare prices on carbonated San Pellegrino drinks and Louis Roederer champagne more keenly than ever.
Waitrose has explicitly ruled out compromising on product quality to compete on price. Instead, it is promoting its value Essentials range to encourage shoppers into stores as Christmas approaches.
Waitrose is part of the John Lewis Partnership and as such is owned by the workforce.
Other middle- class favourites listed on the stock market also attracted an army of shareholders – many now nursing heavy losses.
Here are some that are grabbing the headlines.
MADE.COM SHARES: Ceased trading SHARE PRICE DROP THIS YEAR:
100pc
LOSS OF VALUE THIS YEAR: £595m The middle- class millennial favourite was, like many internet retailers, caught out by the sudden dip in demand as shoppers returned to high streets after pandemic restrictions lifted.
Last week it slumped into administration with the loss of all 573 jobs. Retail giant Next snapped up the brand, a favourite with young urbanites who think they are too cool for Ikea.
But control of stock is in the hands of administrators at PwC, leaving many orders hanging in the balance.
JOULES
SHARES: Ceased trading at 9.2p SHARE PRICE DROP THIS YEAR: 93pc – though the shares are almost certainly worthless
LOSS OF VALUE THIS YEAR: £154m
Once a favourite fashion venue for yummy mummies, Joules rose to popularity with the horse-riding set. But it has struggled for
months as sales at stores fell and the cost of doing business soared.
This month the squeeze became all too much for the brand that
started life at country shows and equestrian events. Founder and brand ambassador Tom Joule has recently returned to an executive role to try to prevent the business from hitting the buffers.
But yesterday the business collapsed into administration after finding itself unable to repay a bank loan, due by the end of this month. The collapse puts 1,600 staff and 130 stores around the country at risk. Advisers are now looking for a buyer.
FEVER-TREE 1056p
SHARE PRICE:
SHARE PRICE DROP THIS YEAR: 66pc
LOSS OF VALUE THIS YEAR: £2bn Spare a thought for posh tonic maker Fever-Tree. It said in September demand remains ‘strong’.
But that has not prevented it from issuing three profit warnings this year as the cost of making its products increased and the cost of shipping its soft drinks around the globe surged, leaving investors with a post-Covid hangover.
Fever-Tree, already one of the more expensive mixer brands,
seemed unable to charge tipplers higher prices to cover those rising costs.
The company is far from down and out. But the sparkle has gone from its once-frothy share price.
HOTEL CHOCOLAT 159p
SHARE PRICE:
SHARE PRICE DROP THIS YEAR: 67pc
LOSS OF VALUE THIS YEAR: £472m Like Fever-Tree, Hotel Chocolat has at least increased sales this year. Chocoholics, it seems, are still prepared to fork out for upmarket confectionery.
It said in July it was ‘business as usual’ at home in the UK where there still seems to be a hunger for its products, but its international strategy has proved problematic.
The firm has reviewed its business plans as a result of rising business costs around the globe, and will close shops in the US.
The result? It expects loss for the year once the payments for exiting America are digested, which, unsurprisingly, has left a bitter taste with investors.