Interbrand report charts effects of recession

Interbrand has published a report investigating the effects of current economic conditions on various consumer sectors.

Interbrand has published a report investigating the effects of current economic conditions on various consumer sectors.

The branding consultancy’s Best Global Brands Interim Report, published on Friday, observes the effects of four current market scenarios.

The ‘hurricane scenario’ is affecting the financial sector, with Citigroup picked out as performing worst, having lost $253bn (£174bn) of its market value in the two years since it ranked number 19 on Interbrand’s Best Global Brands 2008 report.

At the other end of the scale, the report identifies Santander as a ‘good example of a regional bank that is persevering despite the crisis’.

Meanwhile, most at risk from the ‘depression scenario’ are car manufacturers including Ford and General Motors, and videogame console producers Nintendo and Sony.

The study picks out Honda as a performing relatively well in the car sector. Although Interbrand has revised its prediction for Honda’s revenue increase down from 2 per cent in 2009 to -6 per cent this year, it has high hopes for its hybrid car development programme.

Interbrand believes that Honda’s new hybrid car, Insight, could be well-placed and well-priced enough to attract ‘generation Xers’ in the US and Europe.

Interbrand is cynical about Nintendo Wii’s claims that it is recession-proof because of the trend for consumers to stay at home in a downturn. The Japanese recession has contributed to it cutting its sales target by 1 million consoles to 26.5 million for 2009.

However, Nintendo comes off better than its rival Sony in the report, because of its focus on appealing to people who do not usually play video games.

Interbrand titles the third scenario ‘fairer winds’. These market conditions are benefitting low-cost and budget brands. Interbrand cites McDonald’s stealing market share from Starbucks by presenting itself as a more affordable coffee option.

The report also identifies fashion retailer Zara as performing particularly well in this category, with its ‘truly consumer-driven design that is based on input from market specialists, buyers and designers’.

Lastly, ‘the fog’ is affecting premium and high-demand brands such as Moët Hennessy Louis Vuitton, Ferrari and Amazon.

LVMH is predicted to suffer a 10 per cent decline in sales in 2009. Japan’s recession is hitting the group badly, contributing to it scrapping plans for a new ten-storey Ginza flagship store.

Start the discussionStart the discussion
  • Post a comment

Latest articles