I've been a bit too busy to blog recently. No excuses, work has been very busy recently and, in a recession (as they say), work is work.
But the news today, that inflation was falling, has compelled me to write. Even if it's just a little blog.
Stephanie Flanders, the BBC's economics editor, has today published her blog off the back of a "surprise" announcement that inflation has fallen, when it was largely expected to stay still.
Her article is a startling insight into the possible whys and hows this has come about.
Interestingly, however, she pins the most likely reason fairly firmly on the major supermarkets, both for the unexpected fall in inflation, and (in some respects) for partly causing the "squeeze" in the first place.
Graphs depict how wages (50% of the cost base in retail) have stayed relatively stagnant while food prices have risen sharply in 2008 & 2009. So where did all that extra money go?
Well, retailers margins we are led to believe. Or profit, to you and me.
And quite possibly the evidence is there:
Tesco announed pre-tax profits up 12.5% up in October 2010.
Sainsbury's announed pre-tax profits up 8.1% in November 2010.
Asda announced a leap in profits of 58% in October 2010.
Stephanie suggests consumers are starting to fight back, with over 40% of us now purchasing via discounted offers, as opposed to full price. And, if it's helping drive down inflation, I'm rather inclined to agree that as consumers we should be making a point of driving supermarket prices down.
It is a recession and every little helps, you know.
No comments:
Post a Comment