How much attention should companies pay to their share price?

Share prices of all companies have certainly been volatile in the past couple of years. Indeed, individual shares have risen or fallen as much as 25% in a single day. As well as that, most shares have fallen in value by around a half in the past two years and are back at levels seen five or more years ago.

Executive directors had bonuses in share options, so boosting share price made them personally richer

In the twenty first century, shareholder value became the new corporate mantra. CEOs and directors of companies had as main objective the maximisation of shareholder value and that meant boosting the share price. A couple of simple techniques were developed to do this: share buybacks and takeovers. Borrowing money to carry out share buybacks meant more leverage on the balance sheet which meant greater percentage profits growth in the boom years.

Buying companies using debt also increased leverage and allowed the stripping out of surplus cash as dividends. Since executive directors all had bonuses in the form of share options, the more they could boost the share price, they richer they personally became. Directors certainly paid a lot of attention to the share price as the inexorable rise in the early twenty first century could be used to keep investors happy and provide a measure of bonuses to come.

In the bear market since 2007, share prices have fallen faster than ever before - partly due to the embedded leverage of many companies. The worst to suffer have been property companies, financial services companies, and private equity firms whose investments in companies were themselves highly geared. Indeed, for many firms, the options included in bonus packages are 'under water' and new ones at lower prices have been issued.

But falling share prices have other consequences for management. One problem now for many companies is whether they are going to be forced into liquidation as they breach debt covenants. The share price is a reflection of investors' perception of that probability. The lower it is, the less likely that investors will be willing to refinance the firm. Recently, some rights issues have had to be done at 50% or more discount to the current, low, share price to be successful. And, by law, firms cannot issue shares for less than their nominal values of say £1 per share or 25p per share.

Another problem is the lack of loyalty of today's shareholders. In the old days, retail shareholders and institutional investors could be relied upon to invest for the relatively long term. No more. Today’s investors include hedge funds which are just as willing to sell as to buy shares. Some of the major UK banks have ended up part nationalised after sudden collapses in their share price after short selling by hedge funds. Although some people argued that short selling was not the cause, it was banned for a time in the UK on certain shares and even now has to be disclosed.

A low share price makes firms vulnerable, either to bankruptcy or to takeover. And the last thing a CEO wants is to lose control. Just look what happened to John Thain of Merrill Lynch after the takeover in extremis by Bank of America!

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Janette Rutterford is Professor of Financial Management at the OU Business School, having previously worked in corporate finance and investment. Jannette's research includes pension funds, equity valuation and investment history, in particular the history of women and wealth.

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Red tape (or, to use a more modern term, "compliance").

OK, the language is already problematic.

"Best" is hopefully intended to mean "most effective", where effective is defined in deliberately broad terms to satisfy all stakeholders.

Red Tape is itself a pejorative term, suggestive of bureaucratic inefficiency and unnecessary overheads. And 'LightTouch' vs 'Firm Grip' is a response to the Red Tape school of thinking, referring not to the effectiveness of the regulation, but to the onerousness or otherwise of the mechanisms. All in all there's a lot wrapped up in the question.

It might seem pretty non-contentious to suggest that we all want effective light-touch regulation, but any form of regulation is a compromise and means that the result is likely to be found sub-optimal by one or other group ofstakeholders.

If the group that is unhappy is the regulated entity, the unspoken fear is that they will pick up their ball and go and play somewhere else; the only remedy available to the regulator is concerted international action (and, for all the noises about dealing with tax havens, don't hold your breath).

Thus, in the absence of inclusively co-ordinated international action what can we do?

How about demanding higher ethical standards from business? Another no-brainer, surely nobody would argue against it?.

Taking a lead from the professions, can we not demand a licence to operate, revocable if the requisite standards are in anyway unmet; Unethical behaviour would result in sanctions.

The actual regulation could thus be light-touch, it's just the sanctions that could be onerous (and thus the compliance' overhead' could actually be quite modest).

"if the regime is less than attractive, then tax avoiders will merely relocate Head Office to somewhere more favourable"

Maybe the 'eyebrow of the governor of the Bank of England' would have been more effective than the FSA in avoiding the current economic woes?

Access to market is something of a shibboleth. Tax avoidance is inevitably constrained by the above-mentioned fear: "if the regime is less than attractive, then the putative culprit will merely relocate Head Office to somewhere more favourable" argument.

So where the business has its HQ registered, production facilities located or CEO domiciled is increasingly not the key question. Where it attempts to sell its products & services is a territory less easily vacated and maybe we should insist on certain standards before granting access?

Protectionism, I hear you say. Maybe, but the very concept of a Free Trade Area has historically been about eliminating barriers within a zone whilst at the same time maintaining barriers around it. Most have a history of asserting certain conditions for anyone given access to the contained market - a percentage of local content, or whatever. Untrammeled globalism could be argued to be the elimination of not just the inner barriers but also the outer barriers. The question is whether this necessarily takes the 'conditions' with it.

Or am I just being hopelessly naïve?

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David Mayle spent many happy years in high-tech new product development before becoming a management academic at the Open University Business School. He chairs an MBA elective in Creative Management and currently heads the Centre for Innovation, Knowledge and Enterprise.

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Back in 2006, when the USA sub-prime crisis began to bite, few people considered the well-worn cliché, that when America sneezes the rest of the world catches a cold. Even before 2006 there was a likelihood of a housing market crash because exponential growth in anything is unsustainable.

For some time now I have been studying the implications of chaos and complexity science for businesses and the economy. While these sciences do not enable us to predict the precise onset of market failures, they do highlight the need to anticipate potential catastrophes which conventional economic modelling would all but discount as highly improbable. In any complex system, very small disturbances can be amplified to the point whereby the system as a whole becomes unstable.

the warning bells were largely overlooked

The US sub-prime crisis unfolded two years before the onset of the current recession. Even without any detailed knowledge of the increasingly complex (and opaque) mortgage and debt "investment" products which were being traded world wide, the sub-prime crisis which was unfolding in 2006 was bound to have more than a localized impact.

We live in highly connected global economy, but the warning bells were largely overlooked.

Why? It has always been the case that in good times, human beings have a tendency to be overly-optimistic. Conversely, when they are not so good they are inclined to be overly-pessimistic. However, today an additional factor might be cited which is more recent. Over the past twenty years great advances have been made in computer technologies.

Increasingly sophisticated economics models have been made available to bankers and policy makers who would appear to have placed an over-reliance upon them. It is interesting to note that the US Securities and Exchange commission was so confident in its computer calculations of default rates that in 2004, it reduced the level of the capital cushion which had been required from banks since the 1930s.

Three hundred years ago classical science held out the hope that one day we might understand enough about cause and effect to really become "masters of the universe". Modern chaos and complexity scientists have cast a shadow of doubt on this hope.

Even the best of our sophisticated models make approximations, and approximations of reality need to be recognised as that. There is always the risk that reality itself will throw up the unexpected. Some of the best investment trust managers have adopted a 'contrarian' approach, anticipating down turns when things are booming and up turns when they are not.

Managers can help themselves by anticipating change in a similar manner, keeping in mind the fact that whether times are good or bad, sooner or later there will be a reversal of fortunes. Some degree of 'contrarian' anticipation would not help them to predict change, but it would help them to be better prepared when it comes.

In February 2009, the Queen asked a professor at London School of Economics about financial crises, which has now become the question of 2009, at the cost of a few trillion dollars and millions of job losses, “If these things were so large, how come everyone missed them?”

Why was the elephant in the room not visible to anyone? Here, though, we change the question somewhat and ask: even if the companies could have seen the elephant in their boardroom, what would they have done differently?

Consider the corporate response to the recession hitting the auto industry in the UK. The decisions taken include extending the 2008 Christmas shut down (Aston Martin, GM); layoffs (Aston Martin, Bentley, Jaguar Land Rover, Mini, Nissan, Toyota); temporary closure of plants (Honda, GM, Jaguar, Mini, Nissan, Toyota), reduced number of working days in a week (almost all companies); and salary cuts (Honda). These are tough business decisions.

Would the managements of these companies have taken these decisions two years ago if they knew the recession was going to be this bad?

If you asked a management expert the answer would be ‘yes’ the companies would have taken these decisions to stay afloat by becoming leaner and fitter. Tough times require tough decisions, will be the logic forwarded.

But do businesses really behave like that? Do they behave ‘rationally’ when downside risks, perceived or real, are recognised? The answer is ‘it depends’.

Depends - but on what?

First the management will consider how tough decisions will be responded to in the market?

Consider a situation where a board of directors of a company comes to a view that, as a result of certain developments beyond their control, there will be significant negative impact on sales two years down the line. Suppose the appropriate response by management is thought to be reducing costs by making some employees redundant. Will they do it?

They would weigh the impact of announcing such decisions on the share price of the company. If company is planning to raise funds in short term after such announcement they would worry about impact on credit ratings, and so on. They would weigh the possible trade union criticism and publicity liability it may generate.

Consider a chief executive retiring in next six months and due to realise benefits of stock options, will there be incentive to make decisions which may be good for the company in two years time but will push the share prices down now?

Therefore, although the board might successfully identify the risk, they may end up postponing the tough decision.

Second, there is research evidence that firms that have been successful for considerable length of time do not respond well to emerging threats. They suffer from ‘strategic persistence’ syndrome. Successful airline and trucking companies in the US continued with old methods even after radical changes to their environment, including the deregulation of airlines (1978) and trucking (1980). They experienced poor performance over the five years following deregulation.

So past success breeds the view that old tricks will continue to deliver better performance. Sadly, evidence is to the contrary. This ‘strategic persistence’ could thus stop the managements from doing the right thing even if they knew two years ago about the severity of current recession.

Third, some managers may just like the status quo and believe in the maxim if it ain’t broke don’t fixit.

Fourth, one may ask would the central banks have reduced interest rates and eased money supply two years ago, if they had seen the recession coming?

My answer is NO. The monetary policy as practised is reactionary in nature. It is used to reduce the supply of money when inflation is increasing (after an event which has already occurred) and to increase the supply of money to boost demand (in the recession, as now - again, after the event has occurred). This macroeconomics axiom of being reactionary rather than proactive would therefore have prevented the central bankers from acting during the ‘normal times’ of two years ago, even if they saw the recession coming.

Knowing the future results in one response - experiencing the present may result in another.

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The Paradox of Success: An Archival and a Laboratory Study of Strategic Persistence Following Radical Environmental Change by Pino G Audia, Edwin A Locke and Ken G Smith from The Academy of Management Journal, Vol 43 (5) October 2000 features the research on strategic persistence.

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Devendra Kodwani is Lecturer in Finance at the OU Business School. His research interests include the economic regulation of utilities and he has written several papers on privatisation and regulation.

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In times of economic crisis, repetitive negative media reporting can dampen consumer demand and seriously erode business confidence. As with other discretionary costs many businesses begin to question the value of their advertising. The Lord Leverhulme cliché re-emerges:

"I know half of my advertising spend is wasted but which half’. In recession should advertising expenditure be curtailed or aggressively used to boost demand?"

Current declining media revenues indicate companies are cutting back as recession bites, arguably putting sales and industry jobs at risk. Advertising spends can be an indicator of how confidently marketers believe in their brands. Weighing up product, targeting and competitive ramifications, they must decide whether to pull back spending or push harder.

At risk are market share, visibility, customer loyalty, even shareholder confidence in the organisation. Short term battening down hatches, hoping it all will blow over, can be costly. However, studies of previous recessions suggest that continued advertising spending increased sales, market share and brand reputation in the long term.

Advertising plays an important catalytic role in building brands, sales, jobs and funding media. Its power lies in accentuating the positive, now a scarce commodity. Nonetheless the ad industry is often charged with creating false needs and overconsumption, perhaps questioning the value of advertising in terms of its potential to be both a wasteful activity and efficient economic force.

The demise of household name retail stores, banks and traditional media may reflect the evolutionary reality of the market and changing consumer expectations. Advertising insights and creativity remain as essential as ever to reflect the zeitgeist. Innovative new digital technologies, social networks and so forth make advertising effectiveness increasingly measurable, arguably less wasteful.

The sad fact is recent irresponsible and unethical business practice seems to be institutionalised. The culture of steroidal market growth, overproduction, overconsumption, overpayment, over looking; has inevitable consequences and externalities: (credit crunch, fuel crises, global warming, pollution, stress, obesity, etc).

Eventually everybody hurts in the interconnected age.

Eventually everybody hurts in the interconnected age. Social responsibility and sustainability are not fashion items, practitioners must reflect on whose interests are being served. Moral muteness and myopia are no longer excusable; clients and agents need to walk the talk. Advertising has an instrumental role to play but must make nobler moves not try to get ‘more bangs for their buck’ using cheap, deceptive, misleading or offensive tactics.

The current global belt tightening echoes the World War era in the UK when advertising focused on public morale, resource management and regulation of behaviour. Brands survived by adopting utilitarian, anti-waste, less frivolous appeals.

It may be that a return the organic wartime marketing diet could yield sustainable green shoots where ‘less is more’. It may be naive to expect a paradigm shift to a lean yet agile responsibility culture where business uses advertising to promote and share ethical values over sharevalues.

Perhaps the big challenge of the recession is not the value of advertising but the values of advertising. Responsible marketers and advertisers are conscious of consequences, doing things right and doing the right things.

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Some years ago I attended a conference at which an IT expert gave one of the most straightforward and insightful accounts of the design and use of modern day databases and data mining technologies. Drawing on a range of examples he demonstrated how the interpretation and management and control of decision and policy making is passed down to database developers and then transferred (i.e. embedded) into these technological systems. At this point these value-laden, subjective, actions appear to become autonomous political calculations – that is, technical and technological, and therefore 'neutral' and free from human influence.

The expert went on to demonstrate how the integration of databases via network technologies such as the internet, and the extensive opportunities for data mining and matching this creates, enables the creation of data doubles. In plain English: versions of ourselves that are assembled from data about us that we leave behind as we make our way around cyberspace or other IT systems. For example, the web sites we visit, the books, music, travel tickets, and holidays we purchase, what we watch, our profiles on social network sites like Facebook, the discussion groups we participate in, the blogs we read, and so on. When mined, matched and reassembled, whether by commercial organisations, or governments and their agencies this creates and defines our data double.

Is your data double a true reflection?
[Image © copyright Photos.com]

At first glance this sounds as if it’s a relatively straightforward and fairly innocuous process of aggregation, except it’s at this point that those seemingly autonomous political calculations that are embedded into these IT systems re-enter the equation. In reality the identity of a person’s data double is defined less by our own actions than it is by the assumptions, beliefs and opinions of the people who are the policy and decision makers behind the deployment of these systems and how these have been interpreted by the system’s developers. Or, to use a topical example, if you’ve been on holiday to an eco-friendly holiday resort, purchased books by the environmentalist George Monboit, and contributed to blogs opposing the extension of Heathrow airport, it’s currently highly likely that your data double will have been defined accordingly, even if the other 90 per cent of the 'real' you is more akin to Jeremy Clarkson.

While the identity of our data double has limited interest (as far as we know) to commercial organisations such as Amazon, who would simply use it for marketing purposes, it’s not a so straightforward matter when it comes to government. Of course, on the surface, the situation today appears little different to the position that has long applied: pretty much anyone who had leftwing tendencies, joined CND, and/or who visited the Soviet Union prior to its collapse would have a data double that was defined accordingly – albeit on paper (a not insignificant factor, by the way).

Then, as now, the collection of personal data and its use in defining individuals in accordance with the assumptions and beliefs of policy makers, intelligence operatives and other servants of the state was largely justified on the grounds of the search for intelligence in pursuit of national security. I would argue, however, that nowadays this overlooks a far more profound development – the convergence of a number of policy agendas under the seemingly well meaning pursuit of joined-up government.

Put very briefly, the doctrine of joined-up government emerged shortly after the election of new Labour in 1997 and signalled a new, systematic approach to government and policy making. It was, as Bogdanor states, a wider perspective on public administration and management that sought to "make a frontal attack on the so-called 'wicked issues'". That is, issues that pose "a problem for which a solution is either intractable or not easily found, perhaps because of uncertainty as to how to define the problem itself, or uncertainty or disagreement about its causes." (Bogdanor, V. (Ed) (2005: 6) Joined-Up Government, Oxford University Press)

This is an admirable aim, and one that almost anyone who’s had dealings with government bureaucracy would see as inherently progressive. It is not surprising then that, within in a few years, joined-up government had been absorbed into the culture of UK government. Here it coalesced with older public management goals, such as the pursuit of the three E’s (economy, efficiency and effectiveness), and became instrumental in shaping such strategies as Transformational Government (Cabinet Office, 2005), a key objective of which is information sharing across government and the deployment of the IT systems that allow this. But the true significance of the doctrine of joined-up government is much more profound, I’d suggest, for two interrelated reasons. First, its progressiveness rationalises and legitimises the exchange of information across government and thus promotes a highly uncritical and unquestioning attitude to data mining, matching and profiling. Second, it encourages ignorance of the tensions between liberation and control that are inherent in the development of the technologies that allow this. In short, when the doctrine of joined-up government is combined with the security and intelligence policy agendas and the capabilities of IT, I’d argue that we are creating a ‘perfect storm’ in which the real identities of a large and growing number of citizens will be supplanted by our data doubles and our lives will be circumscribed accordingly.

The routine retort to this type of claim is that it’s scaremongering, and anyway, the 'innocent' have nothing to fear. And yet there are enough examples from the relatively recent past of the failure of the ‘innocent are safe’ claim to almost entirely negate this lazy and dubious defence. I’d also suggest that the policy and decision makers whose beliefs and assumptions translate into the autonomous political calculations of the IT systems that underpin the surveillance state are at least implicitly aware that their reputations and positions in society mean they can be confident their data doubles will adequately reflect the real them, and, even if they don’t, anomalies can be easily corrected or safely ignored.

Unfortunately most of us aren’t in this position, which means that if features of our data double attract the attention of these systems, it may prove very difficult to convince our accusers that our data double isn’t really a very good likeness of our 'real', physical selves. Ask anyone who’s been a victim of identify theft for confirmation of what an uphill task claiming a 'clean' identity back can be. What the pursuit of joined-up government and its sister and sibling policies and practices requires, therefore, is a new search for intelligence: an intelligence that fully recognises the threats posed to the majority of the citizens of the UK if our identities are reduced to our data doubles.

About the author

Ivan Horrocks is a lecturer and member of the Technology Management Group at The Open University. He has written many publications about the relationship between information and communication technologies (ICTs) and government and politics.

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Evan Davis gets to the heart of the big finance stories at The Bottom Line.

One of the characteristics of a bull market is that forecasting comes into its own. In the dot com boom of the 1990s, astronomic valuations were placed on internet and telecoms companies because optimistic and growing revenues were extrapolated into infinity.

The present value of all these future cash flows tended to be a very big number. This attitude is exacerbated by the use of spreadsheets such as Excel. It is very easy to start with a number, then grow it by a constant percentage, say 2%, which looks conservative. It is far harder to produce a cash flow forecast which has negative as well as positive growth.

In a recession, the opposite approach takes hold. Horizons shrink, with companies reluctant to look beyond five years, or even less. Those with cash flow problems think more in terms of months or weeks than years.

The key questions: when will it start, and how fast will it be?

But planning for the upturn requires companies to think beyond the falls in sales and profits of now. The key questions now are when is the upturn going to start, and how fast will the rise in sales and profits be?

Factors influencing the timing of the upturn include government policy: the more ‘quantitative easing’ - otherwise called ‘printing of money’- the quicker the upturn is likely to come. Leverage is also a factor – just as lots of debt helped boost profits in the boom years, so the current deleveraging of business will slow the recovery down. And how much companies have cut operations to save costs now will influence how quickly they can take advantage of the upturn. That’s why firms are mothballing plants – and employees – as much as they can.

Even if one can forecast the timing of the upturn, forecasting by how much sales and profits will rise is almost impossible. I certainly wouldn’t like to be asked to produce sales and profits forecasts going out ten years – or even five - for say an estate agency or a car company now. A crystal ball might be a better option than a spreadsheet!

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Janette Rutterford is Professor of Financial Management at the OU Business School, having previously worked in corporate finance and investment. Jannette's research includes pension funds, equity valuation and investment history, in particular the history of women and wealth.

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Evan Davis gets to the heart of the big finance stories at The Bottom Line.

In the current economic climate, companies must ‘optimise’ their decision-making, including pricing decisions. The economist’s prescription for profit maximisation is to set selling prices at a level which equates marginal cost and marginal revenue.

Pricing decisions should therefore be based on an analysis of incremental revenues and costs across a range of possible prices.

The evidence available, however suggests that very few companies adopt this approach, most favouring one of two ‘sub-optimal’ alternatives:

• ‘what the market will bear’ with cost playing no role - neglecting the fact that there is seldom a single price that the ‘market will bear’ but a range of possible selling prices, each with its associated demand level.

• ‘cost plus’ (including a normal profit mark-up) with market demand conditions playing no role. The ‘cost’ figure usually includes various overheads, allocated in an arbitrary way, and has little if any economic meaning.

Reasons given by companies for non-optimising behaviour include:

• lack of information concerning the relationship between price and quantity demanded

• the fact that competitors will match any price reduction and so the company is locked into its current prices regardless of how they were arrived at

• changes in prices being costly to implement (new price lists etc.), a nuisance to sales personnel and disliked by distributors and consumers - whereas profit maximising behaviour implies prices changing whenever there is a change in demand or cost.

In addition, many companies’ cost accounting systems are geared up to providing information for external financial reporting purposes (which require that stock be valued at full production cost) and do not readily provide marginal (incremental) cost information.

Over time, pricing approaches tend to become institutionalised as ‘the way we do things around here’. So there’s a risk of insufficient questioning of current approaches. When times are good, companies can afford to sub-optimise; in the current economic climate, the status quo may not be an option!

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Get the facts behind the big business and finance stories from around the world – and down your street, in The Money Programme.

It’s not surprising that the Money Programme has chosen to highlight the importance of the curry industry to the UK’s economy. Across Britain, Indian food has become a mainstay of consumer meal choices, whether in the form of takeaway food, chilled ready meals or the dining experience offered by Tiffinbites.

In her article on food acculturation (what happens when individuals with different food cultures come into contact, and create changes in the original food culture pattern of the people concerned), food researcher Janet Mitchell rightly pointed out that while British food is traditionally seen as sausages, joints of beef, stews and pies, the reality is that new dishes have replaced the old. What was once seen as ‘foreign’ food is no longer classed as exotic or unusual.

What was once seen as ‘foreign’ food is no longer classed as exotic or unusual

Back in 2003, a BBC survey of the nation’s 10 favourite dinners revealed curry and rice and spaghetti bolognaise to be the country’s most loved meals. When it came to the list of favourite convenience foods, most of the dishes mentioned were also of ethnic origin, particularly Indian food. The transfer of immigrant dishes to a host culture depends upon a number of things, which not only include the availability of the ingredients in shops, but also factors such as the popularization of dishes in restaurants, the influence of the media, and the social ‘rules’ associated with eating at home.

In Western society we lead increasingly busy lives, and as we search for solutions to the time pressures of work and home, many of us have used convenience products to help manage our lives. Convenience food has enabled consumers to cope with the conflict and tensions that sometimes arise between preparing food from scratch and ‘fast food’. Recognising the many roles that women and men have to manage inside and outside the home today, marketers have responded by developing a range of convenience foods that take away some of the pressures we face around mealtimes and eating.

Chicken curry.
[Image © copyright Photos.com]

However, convenience food, such as the Indian takeaways, chilled ready meals, and dining out options mentioned in the Money Programme do more than ‘save time’ for consumers. In the past, convenience food was considered to be a poor substitute for ‘proper’ food, however research shows a far broader acceptance of convenience food today, albeit one that varies from country to country.

Studies in the Netherlands found convenience food is a regular part of everyday meals, in Italy it is seen as a good quality shortcut to delivering traditional family meals, and for the UK and Ireland, takeaway is often used as a treat for the family, especially at weekends.

Consumer behaviour theory tells us that food and its consumption play an important part in the construction of our identities. It creates part of the image we like to portray to other people and how we see ourselves. However, convenience foods have not been something that people have always wanted to be associated with since they are seen as contributing to an unhealthy lifestyle.

Organisations such as the Food Commission, who campaign for wholesome food, suggest many are high in sugar, salt, saturated fat and additives, all of which are considered to be contributors to the increasing incidence of obesity, diabetes and heart disease. However, some marketers have successfully repositioned many of their products to reflect greater tradition and quality. As the Money Programme demonstrates, the Tiffinbites selling point of “less than 10% fat” is targeted at the health conscious eater, as their cooking process uses little oil, no ghee, lean meat, and fresh spices.

Broader foreign travel and experience has evolved more adventurous food preferences among many consumers, and homemade is no longer viewed as ‘authentic’ compared to the convenience versions of various ethnic foods. Even the celebrity chefs recommend convenience solutions to home cooking, with Jamie Oliver’s Ministry of Food cookbook highlighting Patak’s curry pastes.

Food is a key part of our leisure time, and although cooking is still popular, it can be at odds with our desire for convenience or intentions to make ethical or healthy choices. Most family meals are still eaten together, but the increasing popularity of convenience food, snacking and eating out, and the decline in cooking skills and knowledge among UK consumers, has led to concerns about the demise of the family meal.

However, recent research that we have done has shown that in fact many convenience foods on the market today enable consumers to balance busy lives while creating wholesome, nutritionally balanced meals. Convenience foods take away much of the unpleasantness of preparation, remove the need for special skills, and the increased sophistication of the convenience sector in the UK. This is illustrated by Pataks, Noon Products and Tiffinbites, and has reduced perceptual barriers to convenience food for busy people.

We can now substitute the more time consuming stages of a meal with convenience ingredients, reassured that making that choice doesn’t compromise the quality of the end result. We may not always eat a proper meal, but convenience food allows us to eat properly.

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