Half of UK retail businesses have no crisis plan for dealing with a serious reputational issue, a survey for Top 100 law firm Foot Anstey has revealed.
When senior retail leaders were asked “Does your company have a crisis management plan to prevent reputational issues getting out of control?” only 48% said they did, with 4% “Don’t know.”
And when asked who was ultimately responsible for reputation and brand management only half said it sat with the CEO, with other ‘c-suite’ functions taking the lead where it was placed elsewhere.
The surprise results are revealed in The Foot Anstey Retail Report: Brand, the final in a series of 2018 sector insights from Foot Anstey.
“Beyond comfort zone”
Foot Anstey employment partner and head of Retail, Patrick Howarth said: “You don’t have to think very hard or long for the last time you heard of a reputational crisis in the retail sector.
“It’s very surprising to learn half don’t have a plan, but also that a similar number would not have a CEO who is in overall charge of the brand’s reputation – should a plan be needed.
“Managing through a crisis while doing minimal harm to the brand is an entirely different model of working, one which presents challenges beyond the comfort zone of even the most experienced leader.”
Investment and advisory firm Hilco Capital has long experience of working with distressed businesses facing extreme reputational crises.
Its international investment director, Steven Pell, said: “Developing a detailed, action-orientated crisis mitigation plan to manage any negative brand perceptions should be a key part of any retailer’s risk management strategy.
“In a time when the retail sector is facing a number of pressures and the market becomes increasingly competitive the importance of positive brand awareness and protection, trust and attribution in the eyes of the consumer is more important than ever – so retailers can differentiate themselves from their competitors.”