Interesting news this morning that all of the bad publicity being generated against Mike Ashley and Sports Direct is harming his retail empire.
The recent protests by Newcastle fans have included direction action against Sports Direct as well as at the football ground and it is clear where Ashley’s Achilles heel is.
The recent Dispatches TV special exposed the disgraceful way Sports Direct is ran, in terms of both employees and customers, this led to an instant public statement from Mike Ashley via Newcastle United, claiming the programme was inaccurate.
However, the fan protests and especially the Dispatches programme have clearly left their mark and show just what affect bad publicity against Sports Direct can generate.
The Chief Executive of YouGov, Stephan Shakespeare, has used their specialist data analysis to see whether Sports Direct have been harmed as a result of recent negative publicity.
Writing on business website City Am, Shakespeare said;
‘Our Buzz Metric measures whether a respondent has heard something negative or positive about a brand in the past two weeks.
Following the documentary, Sports Direct’s rating has fallen to its lowest level for more than a month, at minus 13.
Mike Ashley, the company founder is also Newcastle United’s owner, which enables him to promote Sports Direct to football fans more effectively. However, the buzz score for football participants and followers is even worse, at minus 19.
But while bad publicity is an issue in itself, perhaps more serious is whether there has been cut through on matters such as value perception and purchase consideration.
The Dispatches programme investigated whether products were labelled as reduced from a price that the goods were never sold at. YouGov’s Value metric shows a decline in whether people believe the brand offers good value. The score has dropped from 15.6 to 6.4
Looking to our Purchase Consideration Metric, we see a drop from 27 in mid-April to 17 at the end of the month, following the allegations and negative headlines
It remains to be seen whether stains on Sports Direct’s reputation will end up having a long-term effect. Will consumers always be tempted by a cheap deal, or will they instead search out a brand that is more ethically conscionable?
The brand has built its success on cheap goods offering perceived value, but with doubts emerging over the legitimacy of these claims, will people look elsewhere?’
The news of this harm to the Sports Direct brand will surely only encourage Newcastle fans protesting against Mike Ashley that they are definitely on the right lines.
The fact that the Sports Direct HQ was raided by police yesterday in connection with the running of Rangers, will only serve to ramp up the pressure even further.