Macroeconomic impact
What impact do you think the recession had on Dunk?
Drag the grey box for each option to tell us if you think it will increase, decrease, or is hard to tell.
| Increase | Decrease | Hard to tell | |
| Average selling price | |||
| Volume of sales | |||
| Profit margins | |||
| Proportions of own-label sales | |||
| Market share | |||
Answer: Macroeconomic impact
If you got the right answer, you'll see a tick. So that you can build your knowledge read the commentary for each section. This will help you think like we do.
Average selling price |
Decrease In recession consumers trade down to cheaper products and discounts are more common. |
|
Volume of sales |
Hard to tell Biscuits are a relatively cheap luxury item so Dunk may have taken sales volume from more expensive categories such as desserts, but equally it may have lost volume due to their customers cutting their spending. |
|
Profit margins |
Decrease Profit margins will be affected by greater price pressure from retailers, and greater competition arising from increased price sensitivity. |
|
Proportion of own label sales |
Hard to tell Some consumers might have traded down to lower priced own label biscuits. However its worth considering that brands promote heavily in economic downturns which increases their prominence and reduces the price gap with own label products. |
|
Market share |
Hard to tell Consumer biscuit consumption mix is likely to have changed to the benefit of companies with a greater proportion of lower priced biscuits. Our client Dunk has a relatively high share in the every day biscuit category, which may have seen a higher share of sales, but it's not clear from the data. |