Primark and JD Sports, meanwhile, have eased store openings. DFS, Britain’s largest sofa retailer, has warned about higher prices and a doubling of waiting times for customers as supply chain bottlenecks take their toll. Yet some of the signs emerging from the retail sector prove too startling to ignore. The festive season has always burnished the finances of the media and advertising industry thanks to Christmas blitzes from brands such as Coca-Cola and John Lewis. He cautions, however, that he was “closely monitoring the trading conditions, including potential headwinds, such as a sustained rise in inflation and lower household consumption”.Ī seasonal hit to finances could prove disastrous for the likes of ITV, Sky and Channel 4 which rely on the fourth quarter to prop up yearly earnings. James MacDonald, the managing editor at WARC data, still expects UK ad investment to reflect some economic recovery and rise by 12.2pc in the final three months of the year, to a new high of £7.8bn.
Adland was poised to record a 18pc jump in revenues to £27.7bn this year, according to the Advertising Association/WARC expenditure report, after a £1.8bn fall in 2020.Īmong the biggest beneficiaries were cinemas, the digital billboard market, radio and TV advertising, which were poised to grow by a respective 315pc, 44pc, 19pc and 15pc this year. Until now, the picture had been looking bright for media and advertising companies. “If supermarkets haven’t got stock on the shelves, then they are not going to put ads on telly encouraging people to come out and buy things because it will create more of a problem.” “You have got to wonder that if these supply chain issues persist then it has got to have an impact on advertising,” says Sarah Simon, an analyst at Berenberg. Industry insiders and analysts now fear firms that are struggling under the strain of the UK’s all encompassing supply chain chaos could usher in a false dawn for adland’s recovery, by taking the knife to their marketing budgets during the Christmas period.
All threaten to hamper Britain’s economic recovery. Retailers across the board are struggling to stock their shelves amid an acute shortage of lorry drivers, the hospitality industry is grappling with a dearth of staff, and spiralling energy bills are putting pressure on consumers’ purses.
Yet no sooner than the pandemic started to fade out of sight, a fresh bout of anxiety is settling in for the winter. Adland was poised to see out the year with a financial flourish as easing restrictions and the return to the office drove an economic recovery that fed into companies’ increased advertising spending. This Christmas season was meant to be different, shaped by a recovery.