The reality is that it's most likely a bit of both.  The way that people react to recession gives room for optimism.  The way they spend probably doesn't.

Birth rate

The economy may be at a 60-year low but the country's birth rate is at a 26-year high.  The average number of children per woman in England and Wales has risen to 1.87, the highest rate since 1980, according to recent figures from the Office of National Statistics. 

What's interesting for our business is that the increase is greatest among older mothers, with the highest percentage rise in births seen among women in their late thirties.  There were 53.8 live births per 1,000 woman aged 35-39 in 2006 - a seven per cent increase on the previous year. 

What's prompted this?  It's certainly not the result of affluence.  Women in the West Midlands are reported as having the most children in England, with 1.96 each, whilst those in Westminster have the lowest rate at 1.12. 

Women's careers are believed to be the driving force behind delaying motherhood until later.  But those are the very careers that are suffering most in our current recession.  Women are being made redundant twice as fast as men and ironically, improved maternity and flexible working rights are being blamed for what seems to be discrimination by hard-pressed businesses.

At the top end of the education/management scale, women are returning to work, driven by financial pressures at home which provide a guilt-free reason to get back into the workplace.  It's a trend that's led The Times newspaper to declare the yummy mummy an ‘endangered species'.

Global position

So potentially, the recession could spell good news for our industry, as career-break mums decide it's a good time to have the baby they've been planning for years and high-fliers return to the workplace.

The global position is less clear.  Even if our focus is on the UK market, we can't escape the effects of a global recession.  The falling value of the Pound against both the Euro and Dollar has wreaked havoc with many manufacturers' profit forecasts this year whilst the banks' reluctance to lend means there's little in the way of a safety net.  This coupled with China's rising raw materials and wages costs, mean that the public will need to get used to all manufactured goods - not just nursery products - becoming more expensive.

A reduction in disposable income linked to a rise in prices could potentially squeeze the premium end of the market.  It's a trend we're already seeing in the fresh- and fast-food sectors.  Price-point store Morrisons saw an 8.1 per cent rise in like-for-like sales in the last three months of 2008 as shoppers defected from more expensive rivals.  Similarly Burger King and KFC have both announced substantial increases in revenue.

Brands

This movement of spending power is where brands matter.  A company like Dorel, that has several brands targeting different sectors of the market, is much more likely to hold on to its customer base than an expensive, niche name. 

The nursery market is also complicated by the ‘granny factory'.  Grandma might not pay for the weekly shop but she's quite likely to spend money on a child car seat.  Here again, brands are important, with value for money, user-friendliness and safety all being important as well as pure desirability. 

The car seat market is particularly challenging.  The four-year development cycle necessary to design, build and test a new car seat means that the recession would have to be predicted four years in advance in order to bring the appropriate product to market.  Not only would this be virtually impossible, anyone capable of achieving it is probably sitting on a beach in the Caribbean by now!  Despite this, the likelihood is that this is one area where parents - even cash strapped ones - will be reluctant to compromise.

Mobility

Prams and pushchairs occupy a more fluid market position.  There have been several years where the choice has been dictated by style, and often the influence of celebrities.  Recession means that showing off becomes a little distasteful whilst rising crime rates make high-value products a target. 

Opportunities

The economic downturn offers clear opportunities for the nursery industry.  It seems that people will continue having babies, and buying things for them, so we have to be able to match their needs.

Our focus this year is on the priorities of our customers.  People are spending more time in their homes, so our new range of kub nursery furniture is a great investment.  Mobility is always going to be necessary, so high-quality products that deliver well against price will be key, and this year we're toning down the look of our Maxi-Cosi and Quinny ranges to reflect the zeitgeist.  Gone are the fluorescent colours, replaced by earthy, elemental tones.

New launches under our Safety 1st brand will offer quality at a price point that will suit parents with less disposable income.

Also vital for 2009 is good customer service to our retailers.  We have taken significant steps over the past 12-18 months to improve our customer service and I'm delighted to say we're getting good feedback from the trade.  In this economy retailers will want to hold minimum stocks, so on-time delivery is essential.

Success in a downturn is about getting the right product in the right place at the right time, but then isn't it always?

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