Middle class brands take a battering as shoppers trade down

They flourished in the good times when the middle class feasted on organic quinoa and trendy woven furniture, and no gin was drunk without an exotic and expensive tonic.

But a group of aspiring brands are feeling the sting of the recession as household bills rise. With inflation at 11.1 percent at a 41-year high, even the country’s Tarquins and Tabithas are feeling the pain of rising prices — and are making cheeky trips to Aldi.

Made.com went out of business last week, picked up by more sustainable shopping giant Next, as customers decided its fire pits and hanging chairs were no longer in fashion.

Joules, a one-time favorite of the well-wearing country set, followed suit yesterday.

Other middle-class obsessions, Hotel Chocolat and Fever-Tree, have seen their share prices plummet, battered by rising costs and turbulent global conditions.

Even Home Counties favorite Waitrose, described as the fanciest supermarket in the country, is struggling to convince enough shoppers to buy its wild Alaskan salmon for £34 a kilo.

Those shoppers searching the shelves for flax and chia to sprinkle on their porridge may have felt a slight jolt in recent months from the chain’s prices — which float higher than its rivals,” according to The Grocer magazine.

A selection of 33 goods purchased from Waitrose cost £71.80, compared to £58.17 from Asda and £59.91 from Tesco. Lidl and Aldi are still £10 cheaper, a recent survey found.

Retail experts say the widening gap explains a decline in Waitrose’s share of the supermarket market as persistent shoppers are more keenly comparing the prices of fizzy San Pellegrino drinks and Louis Roederer champagne than ever.

Waitrose has explicitly ruled out compromising product quality in order to compete on price. Instead, it is promoting its great value Essentials range to entice shoppers to the stores as Christmas approaches.

Waitrose is part of the John Lewis Partnership and as such is owned by the staff.

Other listed middle-class favorites also attracted an army of shareholders – many now suffering heavy losses.

Here are a few that are making headlines.

Made.com

Shares: Ended trade

Share price fall this year: 100 percent

Value loss this year: £595 million

The middle-class millennial favorite, like many internet retailers, was caught off guard by the sudden drop in demand as shoppers returned to the high streets after pandemic restrictions lifted.

Last week it slumped in administration with the loss of all 573 jobs. Retail giant Next picked up the brand, favored by young urbanites who think they’re too cool for Ikea.

But inventory management at PwC is in the hands of administrators, which puts many orders at stake.

Joules

Shares: Stopped trading at 21.2 p.m

Share price fall this year: 93 percent – ​​although the shares are almost certainly worthless

Value loss this year: £154 million

Once a favorite fashion location for yummy mummies, Joules became popular with the riding set. But it has struggled for months as retail sales fell and the cost of doing business skyrocketed.

This month the pressure became too much for the brand that started its life at country shows and equestrian events. Founder and brand ambassador Tom Joule recently returned to an executive role to keep the company from hitting the buffers.

But yesterday the company plunged into administration after failing to repay a bank loan, due at the end of this month. The collapse puts 1,600 employees and 130 stores across the country at risk. Advisers are now looking for a buyer.

Fever-Tree

Share price: 1056p

Share price fall this year: 66 percent

Value loss this year: £2 billion

Spare a thought for fancy tonic maker Fever-Tree. It said in September that demand remains “strong.”

But that hasn’t stopped it from issuing three profit warnings this year as the cost of making its products has risen and the cost of shipping its soft drinks around the world has skyrocketed, leaving investors with left with a post-Covid hangover.

Fever-Tree, already one of the more expensive brands of mixers, seemed unable to charge tipplers higher prices to cover those rising costs.

The company is far from down and out. But the sparkle is gone from the once frothy share price.

Hotel Chocolate

Share price: 159 pp

Share price fall this year: 67 percent

Value loss this year: £472 million

Just like Fever-Tree, Hotel Chocolat has in any case achieved more turnover this year. Chocoholics, it seems, are still willing to shell out for fancy confectionery.

It said in July it was ‘business as usual’ in the UK, which still appears to be hungry for its products, but its international strategy has proved problematic.

The company has revised its business plans due to rising operating costs around the world and will close stores in the US.

The result? It expects a loss for the year once the exit payments are processed, which, unsurprisingly, has left a bitter taste for investors.