Consumer Spending.

[dpg50000]

Ok, I'm no market expert. I do read a lot (both on this forum) and in the papers about both consumer consumption and retail companies who report their figures, and analysts make comments such as "Like for like sales only increased 0.2% over the previous year" or "Sales were roughly flat, with a 0.5% increase in turnover" etc. All of which is described as bad news.

My question is - Why the hell do retail chains alwas expect sales to keep increasing? Especially places such as say, electrical retailers. Surely there is a limit to the no. of tv's, dvd players etc that people need? Think about it - since DVD's came out, an awful lot of people have bought one (to replace a VCR in some cases) and bought a heck of a lot of DVD's. I bought a player and several dvd's to replace my VHS tapes over the last few years. However, surely there comes a point where there's simply not enough on offer to make people spend more e.g. in my case, next to no DVD's I want to buy at present, plus I've got a backlog of existing one's I've yet to watch, mainly bought cheap due to the constant discounting.

I believe my friend said it best. He'd been to HMV, and as usual they had a sale on with several discounted dvd's. He didn't buy anything. He said to me "The thing is the prices are always cheap now. It's got to the point where what you'd consider a bargain two years ago, just seems normal now. And they're just re-releasing any old cr*p now on dvd too. You can only watch so much, regardless of price." I think what he was basically saying was that greed, and lack of quality control, had turned him off buying dvd's.

Same with cars - my 2 year old car is fine and will continue to be for years to come. And other purchases such as computers. My 3 year old pc still does everything I need it to. I have no need for the latest state of the art computer. The manufacturers, however, do need people to buy, hence the price slashing of recent years.

[Cassandra]

Ultimately this leads to the risk of deflation. If prices are constantly decreasing and existing goods work OK then why buy. The end result is that unemployment rises as retailers etc go bust. Also, there is the threat of negative wage inflation as companies can no longer afford to pay as much--- also reduced pay because of reduced bonuses, less overtime etc.

Deflation isn't talked about so much lately but is in my opinion still a real long term threat.

Of course if this does kick in then low interest rates will no longer save us.

[Nomadd]

Same with cars - my 2 year old car is fine and will continue to be for years to come. And other purchases such as computers. My 3 year old pc still does everything I need it to. I have no need for the latest state of the art computer. The manufacturers, however, do need people to buy, hence the price slashing of recent years.

<{POST_SNAPBACK}>

Because people are naturally greedy and stupid. Hence the crazy prices of houses in this country.

Cheap credit has given birth to this 'throw away' culture. MEWing has merely kept the boom going. You can't believe the stick I get over my car - because it's 7-8 years old. I try to explain that it's in absolutely mint condition and has less than 27,000 miles on it, but that's not good enough - I just get accused of being 'tight' (or 'poor') as I haven't changed my car. Same with my motorcycle: 7 years old, 42,000 miles, and runs sweet. I'm the only guy I know who has changed his bike at least 4 times in the last seven years...

Still, the easy ride will come to an end soon. Then people will have to pay all this debt back...

Nomadd

[DonnieDarker]

I have no need for the latest state of the art computer. The manufacturers, however, do need people to buy, hence the price slashing of recent years.

<{POST_SNAPBACK}>

Hmmm. The thing about electric consumables is that they have become relatively cheap.

And whilst everybody owns a DVD player these days, what you also see is that now everyone can afford a computer (so they buy one), or an MP3 player (so they buy them).

As each of these "boxes" has become affordable then people buy more and more (on credit).

Retail figures are increasing because there are so many more "affordable" lifestyle accesories and status symbols to buy.

And don't forget, a lot of these require become outdated every few years: PCs, mobiles, cameras etc.

[29929BlackTuesday]

Because people are naturally greedy and stupid. Hence the crazy prices of houses in this country.

Cheap credit has given birth to this 'throw away' culture. MEWing has merely kept the boom going. You can't believe the stick I get over my car - because it's 7-8 years old. I try to explain that it's in absolutely mint condition and has less than 27,000 miles on it, but that's not good enough - I just get accused of being 'tight' (or 'poor') as I haven't changed my car. Same with my motorcycle: 7 years old, 42,000 miles, and runs sweet. I'm the only guy I know who has changed his bike at least 4 times in the last seven years...

Still, the easy ride will come to an end soon. Then people will have to pay all this debt back...

Nomadd

<{POST_SNAPBACK}>

Love quote about being 'tight'!! I get that with my 10 year old car. I get a kind of pleasure though - knowing my whole car is worth about £400 yet runs beautifully. Have you seen those stickers in backs of cars - "It may be old but it's paid for and it's in front of you"!

I always go for automatics - engines never misused and driven slowly.

Are old houses ever described as 'Second Hand"?

Oh, and local bike shop is in trouble - money has suddenly dried up according to salesman. Wanted me to chop in my old bike for new. Said "Don't be so tight - get it on the never-never"!! Said no thanks but shop looked very tidy and left.

Going to sea-side now with lovely girlfriend in cheap car! Not in debt, renting but never ever been happier.

[Mog]

In case you were wondering, this overconsumption phenomenon is the same over in Asia. I've got lots of friends there, go back regularly-- same deal if not worse. Appears to be universal.

The one thing I do like consuming is good food.. happy to pay for that. Unfortunately you probably won't find it in a supermarket.

[right_freds_dead]

life is about living - not consuming electrical goods.

our only actual considerations in life are to breed and die.

[zzg113]

this overconsumption phenomenon is the same over in Asia. I've got lots of friends there, go back regularly-- same deal if not worse. Appears to be universal.

"growth-at-all-costs" is a problem endemic to capitalism. If the company is not constantly making MORE profit, MORE MORE MORE MORE, shareholders will dump their shares and go elsewhere, share price plummets, company not able to raise capital cheaply, company goes bust (eventually). This is why many companies "go private", ie withdraw from the publicly-quoted stockmarket, as investors are only interested in short-term gain, which can often produce great profits in the short-run, but to the detriment of the long-term viability of the company.

[Harry Sacks]

My car was built in 1981, it cost me £90 7 years ago. I converted it to run on LPG so it costs about 6p per mile. I replaced the clutch 2 years ago at a cost of £70, thats it!

My neighbour had his three year old car serviced last week at a cost of £400.

He is still paying for it with interest and it loses value while he sleeps.

Both machines do exactly the same job.

People really are stupid!

[DonnieDarker]

life is about living - not consuming electrical goods.

our only actual considerations in life are to breed and die.

<{POST_SNAPBACK}>

breed?

Not for everyone, Vicar.

[right_freds_dead]

breed?

Not for everyone, Vicar.

<{POST_SNAPBACK}>

if you dont breed this time - how are you planning to come back.?

the game will be over for you.

(though simulated breeding is acceptable)

[DonnieDarker]

if you dont breed this time - how are you planning to come back.?

the game will be over for you.

(though simulated breeding is acceptable)

<{POST_SNAPBACK}>

Come back?

Are we talking reincarnation now...very timely...deeeeeeeeeeeep.

[zzg113]

Perhaps in my next life house prices might actually be affordable.

[Ah-so]

My question is - Why the hell do retail chains alwas expect sales to keep increasing? Especially places such as say, electrical retailers. Surely there is a limit to the no. of tv's, dvd players etc that people need? Think about it - since DVD's came out, an awful lot of people have bought one (to replace a VCR in some cases) and bought a heck of a lot of DVD's. I bought a player and several dvd's to replace my VHS tapes over the last few years. However, surely there comes a point where there's simply not enough on offer to make people spend more e.g. in my case, next to no DVD's I want to buy at present, plus I've got a backlog of existing one's I've yet to watch, mainly bought cheap due to the constant discounting.

<{POST_SNAPBACK}>

You are right, but my feeling is that the whole culture of buying pre-recorded films really became widespread with the release of DVDs. I put this down to them a) being smaller and we have more disposable income than 6 years ago.

I constantly hear people wittering on about buying a box set of this or that or buying new releases rather than renting. It's a massive con - no one really watches them more than once or twice and they still clutter the place up. Then the films get shown on tv.

Sometime ago, the Matrix was shown on tv. I recorded it and then worte "The Matrix" on the label. I never watched it, but the next time it was on tv, I watched it on channel 5. I still have not watched the video, probably never will.

I may be wrong, but I think that the proportion of the national income spent of pre-recorded video is now far higher than before the release of the DVD format. Since the companies can knock out a DVD for pennies, a 6 quid "bargain" is all profit (excluding cost of sales).

Does anyone else agree with this? The pre-recorded buy market is no longer the martket of film buffs and Star Trek fans.

If we are looking for a profligate, consumerist society, the unecessary purchase of DVD titles seems a pretty good sympton. How were we suckered in to this?

[SarahBell]

Someone told us - who works for a double glazing company - that people are replacing double glazing with new styles. He claims its a very popular thing to do at the moment.

Ok so maybe the last person to be trusted but an interesting idea... when you've bought all the electrical crap you could want then you could replace the windows - less effort maybe than washing them? ;-)

[MarkG]

I constantly hear people wittering on about buying a box set of this or that or buying new releases rather than renting. It's a massive con - no one really watches them more than once or twice and they still clutter the place up.

I haven't bought many DVDs for quite a while, but I have a few hundred, many bought second-hand off the Internet, and most of them I've watched at least twice.

I'm kind of a special case as I work on a lot of low-budget movies so it's useful to be able to see how other people made their movies, but to me the real argument is pretty simple: if I go to the cinema to watch a movie, including the cost of transport, tickets and maybe a drink I pay at least as much as buying the DVD in most cases, and I don't have to sit in a room with people talking on cell phones, kids giggling, teenagers pointing laser pointers at the screen, babies crying and all the other excitement of watching a movie in a cinema.... and since I can easily buy from abroad, I often end up with the DVD before the movie gets to the cinema anyway!

The downside is that I'll have to upgrade to HD-DVD before long, but I'll only be replacing the 'big' movies when that happens: DVD is 'good enough' for most of the wide selection of 1980s B-movies that I own.

However, it is worth remembering that most of those electical goods are cheap because they're made in China by people earning $0.50 an hour. When the Chinese float the yuan, those wages will rise significantly in real terms, and 20 pound DVD players may be history.

[Ah-so]

However, it is worth remembering that most of those electical goods are cheap because they're made in China by people earning $0.50 an hour. When the Chinese float the yuan, those wages will rise significantly in real terms, and 20 pound DVD players may be history.

<{POST_SNAPBACK}>

When the yuan floats, it will increase the cost of imports from China (prepared to be shocked by having to shell out 40 quid for a DVD player!) and make China less competitive to its neighbours. Prepare then for the 19 pound Vietnamese DVD player.

The China will also be able to afford more Western luxury goods with the stronger yuan. More Jonny Walker all lound?

[Big AL]

Capitalism can only work when growth is positive!

[Cassandra]

The China will also be able to afford more Western luxury goods with the stronger yuan. More Jonny Walker all lound?

<{POST_SNAPBACK}>

When the Japanese economy was booming in the 1980's they developed a taste for whisky and imported vast quantities of it. Guess what within a few years the big liquor companies (Suntory, Kirin etc) had perfected the art of making Japanese whisky almost as good as the real thing. Nowadays most whisky in Japan is Japanese, rather than Scotch. Malt whisky and a few luxury brands such as Chivas are available at high prices but most folk drink the local stuff (except when trying to impress, or after been given a very impressive gift).

I expect the same will happen in China. Eventually they will no longer feel the need to copy Western brand names when their own stuff is basically as good.

[tao]

growth in sales good

fall in sales bad

beats me. I would think the less we consume the better..but it seems thats in the world we live in the more we consume the better..sad aint it?

Tao

[Starcrossed]

And yet the world's resources are finite.

As we can see with the rising cost of commodities.

Perhaps the days of cheap stuff are coming to an end.

Ah, are we back to the the old HPC chestnut of inflation vs deflation? Place your bets now...

[Loftus Road]

All I know is I've worked hard to build up my savings over the years and I'll be a seriously pissed off person if they're allowed to be inflated away to compensate the debtors.