Mediterranean weather. A Sunday kick-off. No wonder supermarkets sold millions of sausages, beefburgers and cans of beer to the nation’s legion of expectant footie fans.

According to the pundits, Germany was a young side, inexperienced and eminently beatable. Before kick-off, you could hear excited voices chatting in back gardens, cracking open cans and uncorking wine bottles in the sun. Two hours later and the conversation was sparse. Appetites waned. Only the booze flowed as everyone realised they’d been suckered by the hype yet again.

Apart from bookies, the true victors on Sunday were the supermarkets, which will have raked in a fortune for their month-end accounts. Like them or loathe them, 75 per cent of grocery sales in the UK occur at either Tesco, Asda, Sainsbury’s or Morrisons. If you’re a retailer and you’re keen to achieve scale, then these selling machines are too big ignore.

The internet, which has been the most important development for entrepreneurs in a generation, now accounts for ten per cent of the retail sector as a whole. 
As impressive as that may be given that the widespread adoption of broadband only happened eight years ago, many internet entrepreneurs now realise that if they are serious about their business, offline sales and distribution are key to achieving growth.

Part of the problem for a young business is brand. ‘Getting product recognition online is a major challenge,’ says Johnnie Pattullo, chief executive of the supplements and vitamins company Health Spectrum Europe. ‘Having a product on the shelves of Harrods or Boots not only sells it but also advertises and advocates it.’

Some companies, like Hotel Chocolat, the £52 million confectionary business steered by Angus Thirlwell, started selling via catalogues, then online and more recently graduated to the high street. Recognising the risks of the extra operational costs of being on the high street, Thirlwell insists it’s the right move: ‘One of the first things we found was that it opened us up to a wider demographic; everything from school girls to OAPs, and a greater diversity of income levels. The online customers had been [upper to lower middle class] with a female bias, a credit card and were often in their 40s.’

It’s a dilemma for those smaller retail companies which set up online and are looking to expand and yet don’t have the capital to open a store. The high street continues to be where the bulk of the nation spends its hard earned cash, and the power of the buyer in the supermarket or chain store is as great today as ever before.

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Disappointment with England is a familiar emotion to footie fans up and and down the country, but many businesses will have the added frustration of seeing a knock-on effect in consumer spending.

Darren Evans, manager at Islington-based pub The Trader, says: ‘England’s defeat is definitely going to have a big impact. I think that’s something that will be felt in both small independent pubs and large chains across the country.’

Owen James, economist at the Centre for Economics Business and Research, says the food and drink sectors would have been the biggest beneficiaries from an England victory. ‘The longer they’d stayed in the World Cup, the bigger the boost to sales [in these areas],’ he says.

Howard Archer, economist at financial analysis firm IHS Global Insight, says: ‘No doubt England shirts, flags and general England World Cup merchandise are now being consigned to the reduced price baskets.

‘But there could be a significant boost from the match for any potential suppliers of goal line technology among UK companies. Although knowing our luck, German businesses have probably cornered the market for that as well.’

However, Krisham Rama, spokesperson for the British Retail Consortium (BRC), says the overall loss to high street spending will be small. ‘It would have been a useful boost, but the majority of spending happened in the run-up to the World Cup. Consumer confidence is the most important factor and things like the VAT increase are likely to have a much bigger effect on spending patterns.’

According to the BRC, the previous World Cup tournament in Germany was worth £1.25 billion pounds to the UK economy. 

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MDC Partners, the holding company
that owns ad agencies like Crispin Porter & Bogusky and Kirshenbaum
Bond Senecal & Partners, is about to launch a “Million-Dollar Challenge.” One (or more) lucky marketer will win million and the chance to run his or her own agency.

Winning a million dollars to start your own digital marketing agency may sound like a great deal, but as with any offer that sounds too good to be true, this one comes with a catch.

In addition to the million that the new agency will win, the creator will have to cede 51% of the company to MDC Partners.

Miles Nadal, the chairman of MDC, tells The New York Times that he wants to be a part of the startup boomlet currently happening in digital:

“It’s a great time, as we come out of the recession, to back
entrepreneurs. There’s such an amazing amount of talent in the world today,
to not capitalize on it would be a lost opportunity.”

According to Nadal, there’s only one criteria for entering:

“You do brilliant work, you want to make brands famous and you want to
drive results for clients.”

According to The Times, “MDC will review the submissions, choose at least one plan from among 10
finalists and invest million in starting it up in exchange for a 51
percent stake in the new shop.”

While starting up your own agency may sound like a dream job, potential contestants should be wary. If you’ve got a truly brilliant idea for an agency, chances are it can progress elsewhere. Once you give someone more than half of your company, it stops being your own. In this case, before you’ve even signed a client.

Infrastructure and hiring costs can burn through a million dollars pretty quickly. Not to mention that one great client could be worth more million once an agency starts doing business. 

That said, it could be great PR for the investors, who are excited to own a majority stake in some new business — or many. As Nadal tells the Times:

“If we have five great ideas, we’ll put up million.”

Image: Who Wants To Be A Millionaire

Posts from the Econsultancy blog

So the cider drinkers are happy, but what about the rest of us?

As with any budget, George Osborne’s accounting for the nation’s finances will be deemed as either ‘tough’ or ‘fair’ depending on where you sit in the social food chain. But at least this sounded and felt like a budget that acknowledged we are a country in which one pound in every four is borrowed.

Given the emergency budget’s eerie prelude, you half expected Osborne to propose that we start eating babies in order to get through Britain’s recessionary horrors. So business owners have been pleasantly surprised and relieved by what was announced; the new chancellor has evidently listened to the lobbying that went on in the run-up to the general election.

Concessions on NI contributions for start-ups outside of London and the South East are welcome, as is the cut in corporation tax. Osborne says he wants enterprise and exports to drive economic growth to lead the country out of recession, which will be music to the ears of the Confederation of British Industry.  

Likewise, the extension of entrepreneurs’ relief from £2 million to £5 million over a lifetime seeks to redress some of the harm that was done when taper relief was axed several years ago. As for capital gains tax, everybody knew it was coming and 28 per cent is reasonable in the circumstances.

Retailers will be up in arms about the rise in VAT. The 2.5 per cent hike from January 2011 caused a mutinous cacophony of disapproving ‘whoars’ in the house of commons – cries that were echoed by many in the office here. Some business owners are predicting that this measure alone will send us back into recession.

Perhaps in a nod to the scale of the task, Osborne postponed the review of the regional development agencies. The decision to extend the Enterprise Finance Guarantee scheme seemed to be greeted with a shrug of the shoulders and a sigh of ‘whatever’.

If you’re in the public sector, it may well feel like you’re being asked to dine out on a newborn. The cuts are brutal and may signal the beginning of the end of the welfare state as we know it. Mass redundancies in the public sector are inevitable (in areas like the Midlands where public sector employment is high, the fall-out will be severe), but it will also hit the large number of smaller businesses that gain work from state run enterprises.

A total of £76 billion in cuts has now been penciled in. It is difficult to see how Osborne expects unemployment to drop over the next few years in such circumstances, although the supposedly independent Office of Budget Responsibility claims the measures will not harm the country’s growth prospects, with the economy set to grow by 2.7 per cent in 2014-2015 (2010:1.2 per cent).

Osborne says the economy must grow to address the fiscal deficit. That’s why he wants enterprise to triumph and for the UK to transform into a mighty exporter of goods and services. The logic is sound regarding the need to encourage businesses to grow and create wealth and jobs, but it’s delusory to see this country as an exporter of goods in a meaningful sense. Besides, with other countries in Europe making similar cuts, where will the international demand be coming from? And the consequences of the public sector cuts shouldn’t be glossed over.

Double dip anyone?

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Environmental concerns have been pushed to one side as the recession has forced small businesses to refocus their priorities.


Only 9 per cent of SMEs say they are putting significant investment into environmentally-friendly practices, while 37 per cent admit they are doing little or nothing to make their workplaces greener, up from 30 per cent in 2007, according to finance provider GE Capital.

John Jenkins, CEO of GE Capital UK, says: ‘There is no doubt that the recession has had a major impact on SME’s attitudes and strategies towards green investments. Many firms may have chosen to defer or halt any further outlay into energy and CO2 efficient equipment, preferring to consolidate their financial positions instead.

‘As the economy starts to recover it is vital that this plateau in attitudes is reversed, particularly if SMEs are to make their full contribution to reducing emissions while still supporting economic growth.’

The research also finds that manufacturing, IT, telecoms and media are the sectors that have done the most to reduce their emissions, with retail and leisure having done the least.


Of the 500 owner-managers surveyed, 42 per cent say tax breaks would be the most effective incentive to encourage environmentally-friendly behavior, while 13 per cent cited more regulation.

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