Sector Report trending article by Dick Davison, Head of Schools Strategy
Ahead of the launch of our 2012 Education Sector Report in September (available to order now with advance discount rate), over the Summer we will be looking at several of the key trends the report will explore. In this second trending article, our Head of Strategy, Dick Davison looks at a flight to quality in education in the wake of recession.
As the British economy bumps and scrapes along the bottom of what might or might not be a recovery from the longest and deepest recession in living memory, everyone is looking for signs and portents to indicate the way things really are going.
So when that touchstone of the High Street, Marks & Spencer reported its second quarter figures recently, the pundits fell on them with unusual zeal. And what they showed did seem to be genuinely interesting. While like-for-like sales growth in general merchandise remained flat, food sales were up 3.3%.
The significance of that, for some commentators, is that M&S occupies two different market segments: for general merchandise, especially clothing, it is firmly rooted in the middle of the market but its food retailing is nearer the top of the range. So, they seemed to suggest, conditions remain pretty bleak for the general consumer, but the more affluent are more confident.
There are, of course, different interpretations. One is that, even in a recession, our taste for an occasional treat remains undiminished and M&S, with its successful “dine-in” offers, had tapped very successfully into that demand.
Be that as it may, something similar seemed to be indicated by the 2011 ISC Census of independent schools. While overall numbers were slightly down, by 0.2% – and the fact that the reduction was so slight, despite the economic turbulence of the last three years, might be taken as another illustration of the “rich are still spending” interpretation – there were some significant differences between types of schools.
Numbers were actually slightly UP in HMC schools, which include many of those schools which are regarded as market leaders in their locality or market segment, whether it be the most prominent academic day school in town or a national-brand leading boarding school. This is often taken as evidence of the “flight to quality” which seems to be one of the characteristics of hard times – when people feel they have to spend, despite the economic circumstances, they make more sure than usual that they are buying the best quality.
Sharpening the pencil? With the impact of recession focusing families' minds and budgets, it appears that schools that can demonstrate real value and quality are proving more successful.
But what is “quality” in the independent sector? Because the highest percentage rise in numbers – 0.5% – was in SHMIS schools, many of them less glamorous and less well-known schools, often of modest size and often flourishing alongside bigger and more prominent neighbours.
This emphasises that what consumers – in this case parents – are looking for is not just prestige, but real value for money. There is no sign yet of parents turning away from the real advantages that an independent education offers their children but more and more indications that they are becoming ever more pragmatic and critical.
Our next trending article will look at the national birthrate and the opportunities and threats this may pose to all schools.
To view details of the forthcoming 2012 Sector Report please click here.
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