[Gibbo]

........ how high retailer and manufacturer margins are in the good times?

Everyday we are seeing new lower prices, more 2 for 1 offers and other incentives to buy. OK, lots of shops must have commited their Christmas volumes in the spring / summer and need to clear the products through and are going low margin, higher volume tactic.

With product lifecycles being shorter all the time, manafacturers trying to reduce inventory at year end and hit annual targets it seems to be playing into the hands of the consumer.

For example, things that I have been e-mailed or seen advertised this week. Tesco advertising 2 chart CDs for £15. Current range Golf equipment 33% off already low internet prices. Car dealers discounts galore, shops 20 to 50% sales pre christmas.

Will these become the new price point or are we all going to be happy paying 33% more for all these items in the future??

...or should we wait another week when 10% more is slashed off the price?

[-=TSL=-]

I for one would certainly be unhappy paying 33% more when this downturn is finished.

Although I would be happy if this is the new lowest price, if they do decide to increase again there really is nothing we can do about it..

Can't really go and complain to the stores' management. I can almost hear them saying 'nothing we could do during the downturn but to cut prices and let our revenues take a hit.' Complaints would fall on deaf ears, like most things.

[M3-FAST]

Originally Posted by Gibbo

........ how high retailer and manufacturer margins are in the good times?

Everyday we are seeing new lower prices, more 2 for 1 offers and other incentives to buy. OK, lots of shops must have commited their Christmas volumes in the spring / summer and need to clear the products through and are going low margin, higher volume tactic.

With product lifecycles being shorter all the time, manafacturers trying to reduce inventory at year end and hit annual targets it seems to be playing into the hands of the consumer.

For example, things that I have been e-mailed or seen advertised this week. Tesco advertising 2 chart CDs for £15. Current range Golf equipment 33% off already low internet prices. Car dealers discounts galore, shops 20 to 50% sales pre christmas.

Will these become the new price point or are we all going to be happy paying 33% more for all these items in the future??

mmmmm, good points, had not thought about it like that.

Problem is, at 33% more, a healthy profit is made so money can be invested back into the business and help ensure it's long term survival. (I am aiming this example at smaller business's, not the likes of Tesco, etc..) - At next to no profit, it is not sustainable lng term and will prove the robustness of a lot of business.

We have just learned that the business in the unit next door to us closes it's doors at xmas for the last time. They sell hygiene and cleaning products in bulk and whilst they are mad busy, margins are being cut to the bone. They can no longer keep paying all the bills and themselves and can't see a way out. Someone in Leicester has offered reasonable money for the stock and order book, and also offered to keep them in work for another 6 months (if they want to travel from Stafford to Leciester).

Sad times ahead for many I am afraid and whilst it will be good short term for the consumer, I think it will end up worse when things pick up as a lot of the 'competition' led prices may not be about?

[NFS]

Originally Posted by redE93cab

mmmmm, good points, had not thought about it like that.

Problem is, at 33% more, a healthy profit is made so money can be invested back into the business and help ensure it's long term survival. (I am aiming this example at smaller business's, not the likes of Tesco, etc..) - At next to no profit, it is not sustainable lng term and will prove the robustness of a lot of business.

We have just learned that the business in the unit next door to us closes it's doors at xmas for the last time. They sell hygiene and cleaning products in bulk and whilst they are mad busy, margins are being cut to the bone. They can no longer keep paying all the bills and themselves and can't see a way out. Someone in Leicester has offered reasonable money for the stock and order book, and also offered to keep them in work for another 6 months (if they want to travel from Stafford to Leciester).

Sad times ahead for many I am afraid and whilst it will be good short term for the consumer, I think it will end up worse when things pick up as a lot of the 'competition' led prices may not be about?

I think this is pretty much the truth of it.

Many companies will make a loss over the next 12 months, even ones that were very profitable before the recession.

The economic situation has changed very quickly and very significantly.

Retailers are selling items at a loss just to get people through the door.

Breaking even this Christmas will be a good result.

It's all about survival for the next 12 months ... not profit or growth.

[willhollin]

My turnover is up on last years by nearly 20%, we will see what happens next year although being in the industry I am, I may fair better than others.

[CrimsonRedE93]

Personally I think that quite a few companies will have problems over the next 3-4 months, sales as dropped so quickly in the manufacturing sector cash flow is a massive problem and the banks are still being less than helpful.

The whole company has just taken a 20% paycut until further notice in an attempt to try and preserve cash as orders have dropped by 80% and we have already had redundancies

I think its fair to say that retailers just need money going through the books even if they lose money.

[willhollin]

BTW this is what I do....

[- Paul -]

Originally Posted by willhollin

BTW this is what I do....

You're a welder?

[willhollin]

Originally Posted by - Paul -

You're a welder?

Nope.

[trixman]

No he's a gimp... where's Zed when you need him...

[trixman]

Actually, by the looks of the picture, he builds houses for midgets.