Discount Wars Bring Sharpest Fall In Prices For Seven Years

[interestrateripoff]

http://www.theguardian.com/business/2014/apr/09/retail-prices-record-fall

Heavy discounting on clothing, shoes and electrical goods by duelling retailers helped trigger the fastest fall in prices in Britain's shops in more than seven years last month.

Shop prices overall were 1.7% lower in March than a year earlier, driven down by falls in most non-food categories, but most notably a 12.8% drop in the cost of clothing and footwear and a 4.4% fall in the price of electrical goods. Food inflation also slowed significantly, to 0.8%.

It was the fastest shop-price deflation since the British Retail Consortium/Nielsen index began in December 2006.

Helen Dickinson, the BRC's director-general, said the deflation rate reflected retailers' efforts to attract customers who were carefully managing their budgets. "It's strong industry-wide competition as retailers vie for a share of limited spending capacity that is driving this record-breaking run. Retailers have been responding to their customers with keen prices and promotions to maintain market share," she said.

Prices have fallen in all categories of clothing and footwear for seven successive months, with children's clothing and women's clothing the fastest fallers in March.

The BoE need to swing into action to stop this deflation. Won't someone think of the economy!

[The Knimbies who say No]

Would like to see food prices under a bit more pressure, clothes falls are welcome but I spend many multiples more on food.

Edited April 9, 2014 by The Knimbies who say no

[winkie]

The BoE need to swing into action to stop this deflation. Won't someone think of the economy!

.....think for a moment, people in the developing world are fighting to increase their standard of living and pay......we import much of our goods from countries like this. Over recent years you can clearly see the quality of goods falling, for example what was quality cotton and leather is now polyester and acrylic cheaper man made clothes and shoes......cameras parts were made of metal, now they are light throw away plastic not made to last.........after the demise of quality comes the rise in price, that is if they think they can get it....the big question? So buy the best you can afford because the window is closing, but it won't shut.

[zugzwang]

There's no consumer price inflation because there's no consumer demand. There's no consumer demand because there's no recovery. There's no recovery because the economy is caught intractably in a debt deleveraging depression.

[jammo]

Can't see why prices of everything can't fall. It makes sense when technology makes making stuff cheaper. A 3D printer could make pretty much the entire contents of a pound shop (except consumables) for example. Why should we expect prices to continuously go up when value does not apparently go up?

[Damik]

http://www.theguardi...ces-record-fall

The BoE need to swing into action to stop this deflation. Won't someone think of the economy!

well if house prices are going up other stuff must go down. it is not really a rocket sciense, is it ...

[The Masked Tulip]

Laptops seem very expensive at the moment.

[katchytitle]

.....think for a moment, people in the developing world are fighting to increase their standard of living and pay......we import much of our goods from countries like this. Over recent years you can clearly see the quality of goods falling, for example what was quality cotton and leather is now polyester and acrylic cheaper man made clothes and shoes......cameras parts were made of metal, now they are light throw away plastic not made to last.........after the demise of quality comes the rise in price, that is if they think they can get it....the big question? So buy the best you can afford because the window is closing, but it won't shut.

Companies have never had so much money in their coffers than they have today. That's because they have spent the last 5 years not increasing pay, not hiring and lowering the quantity and quality of everything we buy whilst keeping the price the same (or increasing it!). They will use this extra money not to invest in new machines, plants and labour but to buy back their own shares or pay out special dividends because theres is no further demand for their products.

Since when is a bag of Maltesers 88g or a packet of cornflakes 470g? Count how many blocks there are in your last Cadburys chocolate bar? Coffee beans are being replaced with cheaper varieties and food products loaded with either fructose or cheap machined fat from cheap questionable meat sources.

Electronics will always be in deflation as technology moves faster than other areas of the commercial world. Electronics use advertising to sell...."brighter", "faster", "retina", "simpler" "HD" thats all they can really do to get you to upgrade. Unfortunately, real breakthroughs don't happen that often and you just end up with the majority spending more because the advertising makes them believe it is better. TVs with cameras are all very well but who actually uses them to surf the internet?? Most people are lay people in any given topic and you simply sell by suggesting that:

1. There is more of something

2. It is faster/smaller

3. Other people will be jealous/like you if you own it

4. Its colourful

5. It smells good

I think that is about all lay people care about. Steve jobs understood this well. Stop selling to geeks who understand Ghz - sell to lay people because "songs fit in your pocket", dumb every sales message down to size,speed,colour,jealousy and you have a winning formula in our consumer culture. Look at £300 headphones - they have nothing special in them. Most of the money is spent on advertising. When you plug them into a "beats compliant" device all that happens is the equaliser raises the base to a higher setting. 95% of the target market barely understand what an equalizer does, let alone access it on their MP3 players. The price of convenience for people with little knowledge is very high.

Its all a bit of a whitewash as prices have probably risen for a few years before this fall. As the comment above says they will lower the product quality to achieve this.

[interestrateripoff]

Laptops seem very expensive at the moment.

Perhaps because the economies of scale of shrunk with demand collapsing as people buy tablets and smart phones?

[onlyme2]

Perhaps because the economies of scale of shrunk with demand collapsing as people buy tablets and smart phones?

Partly, though there are arguably still so many sources that there should not really have been increases in prices. Smaller markets attract less discounting and aggressive pricing in order to attract custom - companies fighting tooth and nail over the biggest markets and sweating the rest is probably what is going on here.

[dances with sheeple]

Companies have never had so much money in their coffers than they have today. That's because they have spent the last 5 years not increasing pay, not hiring and lowering the quantity and quality of everything we buy whilst keeping the price the same (or increasing it!). They will use this extra money not to invest in new machines, plants and labour but to buy back their own shares or pay out special dividends because theres is no further demand for their products.

Since when is a bag of Maltesers 88g or a packet of cornflakes 470g? Count how many blocks there are in your last Cadburys chocolate bar? Coffee beans are being replaced with cheaper varieties and food products loaded with either fructose or cheap machined fat from cheap questionable meat sources.

Electronics will always be in deflation as technology moves faster than other areas of the commercial world. Electronics use advertising to sell...."brighter", "faster", "retina", "simpler" "HD" thats all they can really do to get you to upgrade. Unfortunately, real breakthroughs don't happen that often and you just end up with the majority spending more because the advertising makes them believe it is better. TVs with cameras are all very well but who actually uses them to surf the internet?? Most people are lay people in any given topic and you simply sell by suggesting that:

1. There is more of something

2. It is faster/smaller

3. Other people will be jealous/like you if you own it

4. Its colourful

5. It smells good

I think that is about all lay people care about. Steve jobs understood this well. Stop selling to geeks who understand Ghz - sell to lay people because "songs fit in your pocket", dumb every sales message down to size,speed,colour,jealousy and you have a winning formula in our consumer culture. Look at £300 headphones - they have nothing special in them. Most of the money is spent on advertising. When you plug them into a "beats compliant" device all that happens is the equaliser raises the base to a higher setting. 95% of the target market barely understand what an equalizer does, let alone access it on their MP3 players. The price of convenience for people with little knowledge is very high.

Its all a bit of a whitewash as prices have probably risen for a few years before this fall. As the comment above says they will lower the product quality to achieve this.

When "Lay People" don`t have money anymore, the consumption model breaks down. This generation of young are not going to consume like the Debt Junkie or Boomer generations did?

[Ash4781]

Laptops seem very expensive at the moment.

+1. Yes very. I do not understand where the cost is? Maybe it is in the intel processor unit ? I have been looking for an i5 laptops. I got burned in the past on celeron processors. I had an i3 desktop which was fine for office work. Budget processors are a pain imo. The same with integrated graphics my experience is it is better to get a graphics card.

[winkie]

Companies have never had so much money in their coffers than they have today. That's because they have spent the last 5 years not increasing pay, not hiring and lowering the quantity and quality of everything we buy whilst keeping the price the same (or increasing it!). They will use this extra money not to invest in new machines, plants and labour but to buy back their own shares or pay out special dividends because theres is no further demand for their products.

Since when is a bag of Maltesers 88g or a packet of cornflakes 470g? Count how many blocks there are in your last Cadburys chocolate bar? Coffee beans are being replaced with cheaper varieties and food products loaded with either fructose or cheap machined fat from cheap questionable meat sources.

Electronics will always be in deflation as technology moves faster than other areas of the commercial world. Electronics use advertising to sell...."brighter", "faster", "retina", "simpler" "HD" thats all they can really do to get you to upgrade. Unfortunately, real breakthroughs don't happen that often and you just end up with the majority spending more because the advertising makes them believe it is better. TVs with cameras are all very well but who actually uses them to surf the internet?? Most people are lay people in any given topic and you simply sell by suggesting that:

1. There is more of something

2. It is faster/smaller

3. Other people will be jealous/like you if you own it

4. Its colourful

5. It smells good

I think that is about all lay people care about. Steve jobs understood this well. Stop selling to geeks who understand Ghz - sell to lay people because "songs fit in your pocket", dumb every sales message down to size,speed,colour,jealousy and you have a winning formula in our consumer culture. Look at £300 headphones - they have nothing special in them. Most of the money is spent on advertising. When you plug them into a "beats compliant" device all that happens is the equaliser raises the base to a higher setting. 95% of the target market barely understand what an equalizer does, let alone access it on their MP3 players. The price of convenience for people with little knowledge is very high.

Its all a bit of a whitewash as prices have probably risen for a few years before this fall. As the comment above says they will lower the product quality to achieve this.

Yes, I think most people believe the hype and fall for a lot of it hook line and sinker.

[zugzwang]

The chipsets get cheaper but the chip fabs get more expensive. At some point the next generation of chips becomes economically unviable. Perhaps we're there already?

[dances with sheeple]

The only way they will have any remote chance of preventing deflation now is to allow a proper house price correction, and I mean a proper one?

[jammo]

..

I think that is about all lay people care about. Steve jobs understood this well. Stop selling to geeks who understand Ghz - sell to lay people because "songs fit in your pocket", dumb every sales message down to size,speed,colour,jealousy and you have a winning formula in our consumer culture. Look at £300 headphones - they have nothing special in them. Most of the money is spent on advertising. When you plug them into a "beats compliant" device all that happens is the equaliser raises the base to a higher setting. 95% of the target market barely understand what an equalizer does, let alone access it on their MP3 players. The price of convenience for people with little knowledge is very high.

..

Edit: The point about the headphones themselves aside,

People who spend £300 on headphones and then listen to MP3 compressed (lossy) music.

Edited April 9, 2014 by jammo

[@contradevian]

http://www.theguardi...ces-record-fall

The BoE need to swing into action to stop this deflation. Won't someone think of the economy!

Yes they had better nip this in the bud. There is a risk manufacturers will stop making clothes and shoe's.

[zugzwang]

Yes they had better nip this in the bud. There is a risk manufacturers will stop making clothes and shoe's.

UK manufacturing exports hit a three-and-a-half year low.

Nice to see Carney's policies having the same impact on the UK that they've had on his native Canada.

Britain's exports in goods slumped 1.6pc to £23.5bn in February, its lowest since November 2010.

The figures will come as a blow to the Government, which has been seeking to boost exports to rebalance the economic recovery away from consumer spending, which has been the main driver of its surprisingly strong economic recovery over the past year.

The International Monetary Fund on Tuesday said British exports as well as business investment had been disappointing even as it raised its forecast for the country's growth.

Samuel Tombs, UK economist at Capital Economics said the figures showed the economic recovery "remains reliant on growing domestic demand".

http://www.telegraph.co.uk/finance/economics/10754315/British-exports-at-three-and-a-half-year-low.html

[GeordieAndy]

Laptops seem very expensive at the moment.

Huh? Laptops, especially basic touch screen Windows 8 ones have crashed recently to under £300 e.g. here with a lot giving you a full MS Office (Home and Student) copy included!

The real action is with the Windows 8 tablets though with most of the 10" and below ones under £350 and again with free Office Home and Student. I went for one of these recently (Asus T100) and use this as my main computer hooked up to a full HD external monitor via HDMI and it's honestly great and the new Atom processors are like a previous generation i3 performance wise. Also by running this thing rather than my Core i7 desktop I'm saving a £'s every week on electricity costs

[katchytitle]

Edit: The point about the headphones themselves aside,

People who spend £300 on headphones and then listen to MP3 compressed (lossy) music.

I really doubt 99% of the music buying public understand what lossy, encoding, 256Kb vs 128Kb vs VorBiS is. Everyone has their niche and they exploit people using it.

Those that just know the answer generally just feel smug that they know and they get the "know-it-all" tag when they try and tell people they are being ripped off. For instance, I know nothing about building a boat and I'd do some research before I bought a yacht (if I could afford one!) but the people who buy yachts are simply interested in the 5 senses view of their product and whether it makes people jealous so they get ripped off. Yachts are obviously a bad example for most people but it's the same with everything. Lying to your customer has become the new way to generate a higher return.

. The sad thing is most people don't want to hear it. Their consumerism has given them happiness for so long they have forgotten any other way of filling a void in their lives.

[crashmonitor]

All going Japanese too, an aging population that is frigging bored stupid by stuff. We are all trying to clear our houses aren't we these days and achieve zen. The tips are filling up quicker than the shops are em,ptying aren't they?

Good job we have got a steady influx of immigrants who might actually want to be hobbled by clutter.

[wonderpup]

Yes they had better nip this in the bud. There is a risk manufacturers will stop making clothes and shoe's.

I will of course be going naked and barefoot in future in anticipation of the price falls to come -as will we all- but to save embarrassment I suggest that a strategically placed electronic consumer good (of reasonable size ) will suffice to meet the needs of modesty till that happy day comes.

[Maynardgravy]

Edit: The point about the headphones themselves aside,

People who spend £300 on headphones and then listen to MP3 compressed (lossy) music.

Thank you!!!

People who can't tell the difference between an mp3 and a high-end audio file have cloth ears and should not be allowed anywhere near decent headphones.

someone proudly let me try their Dr Dre beats the other month. I used them to listen to some Shostakovich and after 2 minutes I told them never to darken my door again with the sh1te and went back to me 10 year old sennheisers.

[okaycuckoo]

UK manufacturing exports hit a three-and-a-half year low.

Nice to see Carney's policies having the same impact on the UK that they've had on his native Canada.

Britain's exports in goods slumped 1.6pc to £23.5bn in February, its lowest since November 2010.

"The figures will come as a blow to the Government, which has been seeking to boost exports to rebalance the economic recovery away from consumer spending, which has been the main driver of its surprisingly strong economic recovery over the past year.

The International Monetary Fund on Tuesday said British exports as well as business investment had been disappointing even as it raised its forecast for the country's growth.

Samuel Tombs, UK economist at Capital Economics said the figures showed the economic recovery "remains reliant on growing domestic demand".

UK trade deficit shrinks: The UK's trade deficit decreased slightly in the three months to February, because falling imports have outpaced a drop in exports. Imports over the three months fell by 4.7 per cent, while exports decreased by 2.5 per cent, meaning the trade deficit in goods was £26.2bn for the period. (Financial Times)

I guess the growing domestic demand is for stuff that's not imported. What could it be?

edit: that's cut 'n paste from alphaville.

Edited April 9, 2014 by okaycuckoo

[billybong]

UK trade deficit shrinks: The UK's trade deficit decreased slightly in the three months to February, because falling imports have outpaced a drop in exports. Imports over the three months fell by 4.7 per cent, while exports decreased by 2.5 per cent, meaning the trade deficit in goods was £26.2bn for the period. (Financial Times)

I guess the growing domestic demand is for stuff that's not imported. What could it be?

edit: that's cut 'n paste from alphaville.

and incredibly growth is claimed to be on the UP

Edited April 9, 2014 by billybong