A fall in sales could actually prove positive for many fresh produce companies, according to the latest report from industry analyst Plimsoll Publishing.

Given the very real possibility that any of the UK’s 1,200 fresh produce companies could see their sales fall by as much as 30 per cent in 2009, Plimsoll has published its latest Recession Edition report to help managers understand the impact this would have on the market and how each individual company would react.

But the results show that, rather bizarrely, a fall in sales would actually be good news for many companies, who would make more profit and be able to reduce their debts. A fall in sales would put many firms on to a solid financial footing, to build upon when business conditions normalise.

The report shows: 79 companies would make more profit on 30 per cent less sales, by implementing major cost reductions; 199 firms will struggle to cope as rising debts hamper their survival options; several companies could see staff numbers reduce by 40 per cent, as costs come in line with sales - up to 5,000 more jobs could be at risk; and 354 cash-rich companies are in a strong position to weather the economic storm, giving them more time to adjust their business models.

Within the Recession Edition Report, each of the 1,200 companies has been given a survival year strategy. Included with this is a targeted set of key performance indicators for productivity, debts, profitability and cash flow. A full graphical analysis highlights the changes each company must make to minimise the effect of the falling sales.

David Pattison, Plimsoll senior analyst, saw first-hand how fresh produce companies coped through the last recession. “Companies need to act now if they are going to weather this storm,” he said. “As unpopular as job losses and cost reducing is, businesses will have little choice. What we have been able to show in our work is that failure is avoidable, as long as the necessary changes are implemented without delay.”

Topics