To what extent do you think that the amount of profits earned by a business in a recession depends entirely on the industry in which it operates?

Topics: Government spending, Late-2000s recession, Fast food Pages: 3 (879 words) Published: February 4, 2014
With reference to the item above and your own research, to what extent do you think that the amount of profits earned by a business in a recession depends entirely on the industry in which it operates?

An economic downturn is when the GDP of the country falls. The GDP is the Gross Domestic Product of the country and accounts for all transactions made throughout each quarter of the period. If the GDP falls for two consecutive quarters then that is classed as a recession and the government should take action to help stimulate the economy.

One of the main changes in a particular industry during the recession was the Fast Food industry. During the recession these industries seemed invulnerable to the dramatic decrease in luxury spending due to the increased price of necessity goods. The first company which have been doing well whilst England have been in and out of recession is KFC, they seemed to have gained the benefits of people having less money to spend whilst being able to put back into the economy by creating jobs, this is shown in the Worcester the ‘Job Centre’ which was approached by KFC to fill 70 jobs that were to be created in 2008 just after the first recession had began. Also in February 2009 BBC news published another story quoting KFC on ‘creating 9000 jobs over the next 3-5 years’ this is a staggering figure and one that was created during a heavy recession. The reason they were so confident with their figures throughout the recession was because they believed people who now had less money to spend were drawn to cheaper foods, therefore boosting the fast food industry.

In contrast, one industry, which isn’t secure, is the car industry, which took a bad turn during the recession. In December 2008 many car manufacturers had to cut shifts meaning shorter hours for workers to save money on salaries. Aston Martin has to cut 600 jobs due to the extreme market conditions proving they have taken on the strategy to cut costs as opposed to optimise...
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