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Mr Yogi

Consumer Confidence Falls Off Cliff In Ome Month

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Remember the retail figures from May showing a big increase in sales, followed by M&S and John Lewis reporting huge drops in June?

Well, I can confirm that something very strange seems to have happened.

I am a self-employed cabinetmaker, building bespoke furniture and kitchens for retail clients. In May, I spent more time doing quotes than making furniture. The phone was ringing off the hook, and emails arriving every day with new enquiries for having furniture made.

I sent out over a dozen quotes for good sized jobs, each of which would give me around a months worth of work. Potentially I could have sold a year's worth of production in one month.

Now normally my 'hit rate' is around 50%; that is I get about half the jobs I quote for. This is about right - it suggests that my prices are OK, without being too cheap.

This time however, when I followed up the quotes with a phone call a couple of weeks later in mid June, the reaction was universal.

'We're going to put everything on hold for a few months' and 'We've decided not to have any work done till next year' were representitive of the responses I got. I only managed to close one deal out of all of them.

These people were not opting for a cheaper alternative. They don't want a cheaper alternative! Instead they are opting to spend absolutely nothing until the economic situation is a little clearer.

I can't say I blame them. The knock-on effect has been that I have had to tell the builder who was had quoted for our planned extension that 'We're going have to wait a while'.

Something happened in early June to blow consumer confidence out of the water. When this feeds into house price figures in around Aug-Sept the falls will I think, be dramatic.

Fortunately, my order book is full until November. I have minimal overheads and can turn my hand to anything so am not too worried. I'm not banking on selling any £20k kitchens for a while, though!

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Hope you don’t end up having to steal picknick baskets for a living mr yogi.

Sadly one way or another, people are going to have to start living within their means.

Gone are the days where I will “add an extension to my house and add £50k to it” , now we have “adding an extension will add £50k to the house. But can I afford the interest and it only adds value if I sell”

The future is bleak for all; it will take years to get back to some equilibrium.

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Mr Yogi - I'm not allowed to PM so will have to post this. I'm going to be in the market for a kitchen for a barn conversion I am planning for late next year. I want to put a kitchen in a 38ft by 15ft room, I want a large portion of wow factor, I'm a real wood fan and have been considering getting a carpenter for a bespoke solution. Its in Worcestershire. Drop me a line if its something that might interest you or someone you know.

Kindest Regards

peter.skellan@eml.cc

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Remember the retail figures from May showing a big increase in sales, followed by M&S and John Lewis reporting huge drops in June?

Well, I can confirm that something very strange seems to have happened.

I am a self-employed cabinetmaker, building bespoke furniture and kitchens for retail clients. In May, I spent more time doing quotes than making furniture. The phone was ringing off the hook, and emails arriving every day with new enquiries for having furniture made.

I sent out over a dozen quotes for good sized jobs, each of which would give me around a months worth of work. Potentially I could have sold a year's worth of production in one month.

Now normally my 'hit rate' is around 50%; that is I get about half the jobs I quote for. This is about right - it suggests that my prices are OK, without being too cheap.

This time however, when I followed up the quotes with a phone call a couple of weeks later in mid June, the reaction was universal.

'We're going to put everything on hold for a few months' and 'We've decided not to have any work done till next year' were representitive of the responses I got. I only managed to close one deal out of all of them.

These people were not opting for a cheaper alternative. They don't want a cheaper alternative! Instead they are opting to spend absolutely nothing until the economic situation is a little clearer.

I can't say I blame them. The knock-on effect has been that I have had to tell the builder who was had quoted for our planned extension that 'We're going have to wait a while'.

Something happened in early June to blow consumer confidence out of the water. When this feeds into house price figures in around Aug-Sept the falls will I think, be dramatic.

Fortunately, my order book is full until November. I have minimal overheads and can turn my hand to anything so am not too worried. I'm not banking on selling any £20k kitchens for a while, though!

By coincidence I posted a similar post last night.

Spending has come to a complete stop, the like of which we have never seen before.

Nick

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Well, I can confirm that something very strange seems to have happened.

I am a self-employed cabinetmaker, building bespoke furniture and kitchens for retail clients. In May, I spent more time doing quotes than making furniture. The phone was ringing off the hook, and emails arriving every day with new enquiries for having furniture made.

I sent out over a dozen quotes for good sized jobs, each of which would give me around a months worth of work. Potentially I could have sold a year's worth of production in one month.

Now normally my 'hit rate' is around 50%; that is I get about half the jobs I quote for. This is about right - it suggests that my prices are OK, without being too cheap.

This time however, when I followed up the quotes with a phone call a couple of weeks later in mid June, the reaction was universal.

Something happened in early June to blow consumer confidence out of the water. When this feeds into house price figures in around Aug-Sept the falls will I think, be dramatic.

Fortunately, my order book is full until November. I have minimal overheads and can turn my hand to anything so am not too worried. I'm not banking on selling any £20k kitchens for a while, though!

Very sad to hear this. It is interesting that the markets tumble from 19 May onwards has been reflected in consumer behaviour. The strange thing is that this stuff seemed to happen before the real bear food hit the media. I'm still trying to work out what (other than the bleeding obvious) caused the sudden shift in sentiment from "it will blow over" to "OMFG!"

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I think we will look back on the last five years as just a time when everyone just seemed to lose their minds. All that spending generated from taking out equity or putting it on credit cards.

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It is interesting that the markets tumble from 19 May onwards has been reflected in consumer behaviour. The strange thing is that this stuff seemed to happen before the real bear food hit the media. I'm still trying to work out what (other than the bleeding obvious) caused the sudden shift in sentiment from "it will blow over" to "OMFG!"

Media editors and producers are consumers too.

No reason why they should be more financially savvy than the average joe. Perhaps it was only when they stopped spending, and noticed their friends had stopped spending, that it occurred to them to cover the story?

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3 Months ago i was thinking about buying a bigger car, last month i got a bit scared and thought i would hold on, last saturday my bank told me i was overdrawn, i am very carefull with money, the only debt i have is my mortgage.

I have stopped spending, today i was going to have meal for £6 but decided to spend £2.50 instead.

All my friends are getting scared as well.

Edited by goldman

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The funny thing is I have some money put aside for a deposit but since house prices are falling so much I didn't need it all so bought a new TV and computer last month ;)

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Fortunately, my order book is full until November. I have minimal overheads and can turn my hand to anything so am not too worried. I'm not banking on selling any £20k kitchens for a while, though!

Have you thought above accepting Credit Card payments Mr Yogi? This might help your order book.

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Have you thought above accepting Credit Card payments Mr Yogi? This might help your order book.

:lol::lol::lol:

Actually, my order book is fine. I have minimal overheads, no debts, and no staff - just me.

My core customers are middle-aged professionals who have long since paid off the mortgage and pay off their credit cards every month.

All in all, I can survive a recession easily - even if it might mean going after different types of work than I prefer to do.

The companies that will struggle are those with debts, high overheads, and large payrolls. If there is less money around it will come my way rather than theirs as I can undercut them by 50% and still do OK. I don't even have to charge VAT as I am under the threshold. :)

Edited by Mr Yogi

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:lol::lol::lol:

Actually, my order book is fine. I have minimal overheads, no debts, and no staff - just me.

My core customers are middle-aged professionals who have long since paid off the mortgage and pay off their credit cards every month.

All in all, I can survive a recession easily - even if it might mean going after different types of work than I prefer to do.

The companies that will struggle are those with debts, high overheads, and large payrolls. If there is less money around it will come my way rather than theirs as I can undercut them by 50% and still do OK. I don't even have to charge VAT as I am under the threshold. :)

Snap - we are in indentical position. Tourism bookings to our islands fell off a cliff a few months ago, but we will survive with no overheads except some bookings software and google ads fees, no staff. Many of our Sunday Times Travel Supplement competitors will go tits up for sure, with their expensive offices, teams of girls answering the blower, absurdly overpriced colour glossy mag ads, and so on. They were already struggling to compete with direct selling hotels and airlines anyway, so the recession will put paid to the likes of Barefoot Traveller, and many many more of its ilk - these were MEW fuelled for years - most of us know someone who had a 15-50k tropical wedding and honeymoon at some point in the last 10 years, but how many of us know someone with weddings like this coming up...

So Mr Yogi and I will emerge the other side of this recession stonger than before and with fewer competitors at the start of the next boom (or at least he will - if airline discretionary-leisure travel dies totally I shall be chopping down trees for cabinet makers to do something useful with them)

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Update

It's looking like carnage out there!

I spent Friday visiting several suppliers picking up materials etc and the story was the same everywhere.

Small blokes like me doing OK because we can get by on very little and change course very quickly.

Medium to large firms however, are losing money hand over fist as business has completely dried up. My suppliers are $hitting theirselves - they seem to expect half their big customers to go to the wall in the next year.

The story was confirmed in the pub on Saturday night. I bumped into a guy who used to work for me who then got a nice job with one of Manchester's biggest kitchen manufacturers in their finishing shop. A month ago they laid off half their staff, and things look dire. When you've got a big factory, you can't lay off half your staff, remain productive, and cover your overheads!

I'm sure the same thing is happening in all industries - it just happens behind the scenes and never makes the media as the numbers of people directly affected are relatively small - 20 or 30 at a time.

The cumulative effect of this sudden downturn is going to be absolutely massive, however.

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Update

It's looking like carnage out there!

I spent Friday visiting several suppliers picking up materials etc and the story was the same everywhere.

Small blokes like me doing OK because we can get by on very little and change course very quickly.

Medium to large firms however, are losing money hand over fist as business has completely dried up. My suppliers are $hitting theirselves - they seem to expect half their big customers to go to the wall in the next year.

The story was confirmed in the pub on Saturday night. I bumped into a guy who used to work for me who then got a nice job with one of Manchester's biggest kitchen manufacturers in their finishing shop. A month ago they laid off half their staff, and things look dire. When you've got a big factory, you can't lay off half your staff, remain productive, and cover your overheads!

I'm sure the same thing is happening in all industries - it just happens behind the scenes and never makes the media as the numbers of people directly affected are relatively small - 20 or 30 at a time.

The cumulative effect of this sudden downturn is going to be absolutely massive, however.

I hear you. On saturday morning round about 11am, some bloke knocked on the door asking if we needed some UPVC windows replacement done. We usually get the usual leaflets, but for him to actually go round the block like this, things must be really turning bad sadly.

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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