Will prices come down now?

[APoc184]

Bump.

A cut in interest rates. A further cut expected and also huge fuel cut expected in the new year.
Will we now see more pressure on suppliers to lower prices? Surely there has been enough "cuts" to support the lowering of prices.

 

[APoc184]

Woolworths and Pick 'n Pay have been quite adamant that they will pass savings onto the consumer. I guess in light of the global financial crisis we shall have to wait and see.

I see that Woolworths in the UK has gone to pieces. Closing all their stores.

 

[Slaine73]

Oh come on, let's be honest, what's the chance?

 

[APoc184]

Oh come on, let's be honest, what's the chance?

1 in a million? But it is still a chance...

 

[zeb]

I remember when the Rand fell to about R14 against the $ a good couple of years ago. All prices skyrocketed and later on as the Rand recovered they never corrected.
There's absolutely no reason that they'll come down this time

 

[2CentsWorth]

Bump.

A cut in interest rates. A further cut expected and also huge fuel cut expected in the new year.
Will we now see more pressure on suppliers to lower prices? Surely there has been enough "cuts" to support the lowering of prices.

No. Retail costs may come down somewhat, but other input costs will remain high. Labour, for example, is still very expensive and continues to get more expensive with outrageous demands for increases. Also, the rand is weak at the moment, and as SA is a nett importer, it is obviously a bigger problem.

Also, 0.5% interest rate cate in the midst of a multi industrial recession doesn't mean anything - in fact, it will probably not kickstart growth, so I wouldn't be looking at this as a very good indicator of things to come.

 

[Nanfeishen]

Or will the suppliers and supermarkets just keep it the same and bank the extra profit?

At the end of the day, those are the words that count for business.

Oh, you may find some products in some stores may come down slightly in a sort of "token" gesture, but those few decreases will be small enough not to offset the profit margin already there.

 

[Abe]

I remember when the Rand fell to about R14 against the $ a good couple of years ago. All prices skyrocketed and later on as the Rand recovered they never corrected.
There's absolutely no reason that they'll come down this time

The Car Manufacturers were nailed for that. They had to pay a big fine.

 

[2CentsWorth]

The Car Manufacturers were nailed for that. They had to pay a big fine.

And seemingly they paid the fines without rectifying the problem. Retail prices of vehicles are still for the most part "fixed" by the manufacturers - not to mention the cars in similar classes are somehow priced virtually identically. And let's not even talk about the fact that locally manufactured vehicles are sometimes retailed for more here [in SA] than the countries they're being exported to - yet they're not fined over that??

Anyway, imposing fines is stupid, as they just restructure and pass the costs back to the consumer. It's like the Tiger Brands bread price fixing debacle - bread prices actually went up since the massive fine, so who is actually footing the bill? Us sods who got ****ed over in the first place. Fines schmines.

 

[Turtle]

I understand that suppliers cant change prices every month because they are not sure of the costs, but they are very quick to raise prices when petrol does go up.

I'm curious, how many people here *actually* regularly do much (or any) price-comparison-based shopping? I mean, I'll be the first to admit, I'll just buy a loaf of bread from whatever place is nearest to me, without even looking at the price. And even once I'm there, I'll choose a loaf not on which is cheapest, but on which one has the longest to go until the expiration date. I seldom compare prices for groceries, but when I occasionally do, I find there are sometimes big differences in prices between different places ... but with the proportion of my monthly expenses that my typical average grocery bills represent, the potential savings by comparing prices don't seem to be worth the time and effort required to do so (especially since quality differences, which for things like fruit can be huge, make decisions more complex). Clearly I'm not giving retailers any incentive to lower their prices, but is my shopping behaviour representative of the average? Who here compares prices? Or has e.g. a husband/wife or family member do that? My last girlfriend did that sort of thing and it made a worthwhile difference to the bills. Maybe we should set up websites or something that allow easy price comparison for typical 'baskets of goods' etc. at various outlets, I don't know.

The concept of "passing on savings" by lowering prices for customers will happen if it's possible and there is competition. It's that simple. I think to assume that retailers never lower prices is silly (just typical anti-corporate "ooh greed" brainwashing), I'm sure they do, we probably just don't notice when they do.