Profiteering or not.?

[jon]

I was surprised by the 40% increase in Asda's tinned curry that was packaged long before for the spike in inflation.

[Colin Bignell]

When the six day war started, a local greengrocer immediately put up the price of onions from Egypt. He claimed the reason was that he was discouraging panic buying by putting up the price before any shortage happened. We bought the onions from a different greengrocer, who hadn't put up his prices.

[Bob Henson]

It is absolutely rife at the moment. The retailers - particularly the supermarkets, see the current unstable financial situation as a licence to print money and are charging anything they think they might get away with whilst the public are confused. It's like the old days when our currency went decimal and many unscrupulous retailers charged the old pence price in new pence and thus more than doubled their profits. A TV reporter who checks a regular basket of goods reported Aldi frozen chips had doubled, all but a few pence, in the last year - there has been no potato shortage or anything to justify that level of increase. I do our (delivered) family shop these days and am quite horrified at the level of increases.

There was a lot to be said for old days before they abolished retail price maintenance and allowed Sunday trading. Nearly all our small shops closed and we have been at the mercy of unscrupulous big traders ever since.

[GB]

Suppose, as a retailer, I have bought curry for 50p and sell it for £1. I have some in stock that I bought for 50p

Now, suppose that I hear from my supplier that any new stock I buy will cost me £1.50. Should I sell my existing stock for £1, whilst buying in new stock for £1.50?

[Bob Henson]

If you are being moral, you will sell it at the same rate until the more expensive stock arrives and then put your price up appropriately. Not many would, though. In the days of retail price maintenance there would have been no moral dilemma.

[Andrew]

That company was bought with humungous debt (funny money) and the only way that can be financed is by putting up prices (AND/or removing all the loss-leaders).

[alan_m]

Ah RRP which meant that everyone overpaid.

And you really think local small shops would be cheaper? Friends of mine life in a rural area with a few small shops and a couple of "local" small supermarkets that are 15 minutes drive away. When I go to visit I find, in general, to be at least 20% higher than I'm used to paying living in a city. A pint of beer is a lot cheaper but nearly everything else is a much higher in price.

[Andrew]

If I was a landlord and bought a 3-bed semi in the South East in about 1998 for 80,000 pounds (going rate at the time). Should the rent I charge be related to what I originally paid for the property (about 600 pounds/month) or should I charge the 'going rate' (now about 1,300 pounds per month) ?.

[alan_m]

What makes the OP sure that they didn't keep the price the same for the current stock and then put price up when they got the new stock.

Supermarkets get through most of their (food) stock in store in a couple of days. If it doesn't sell this fast it will soon disappear from the shelves, often never to be seen again.

[The Natural Philosopher]

Retail pricing is a game in which morality plays no part. Put prices up, Lose sales. As Waitrose discovered. Don't put prices up, lose money but gain sales.

[The Natural Philosopher]

Wot E sed To see any fresh produce on the shelves more than two days is rare, and then it has a 'reduced' sticker on it.

[GB]

I'm not sure why that is moral?

And, why does that apply to food retailers, but not say car retailers?

People buy a home at market value, and years later sell it at market value, even though that's often been higher. Would it be necessary for them to sell it for the same price that they paid, in order to be moral?

I'm genuinely puzzled.

[alan_m]

In 1998 legislation wasn't too much on the tenants side. Things have changed since 1998 and you now have to factor in the extra costs of legislation including perhaps no rent for half a year with a bad tenant.

Just wait when you have to install solar and ASHP to your rented property to meet government green targets. :)

[Joe]

You don't have to go anywhere rural. The suburban corner shops are called 'convenience' stores, but you pay for that convenience. As you do in the small 'local' versions of the big supermarkets, where prices are higher than in the full-sized places.

[Colin Bignell]

That sounds like a good way to generate cash flow problems.

[Bob Henson]

No. It meant you knew what you were going to have to pay and hence what was reasonable. In those days there was real competition. If a manufacturer set their price higher than a competitor's for a similar product, they sold less or none at all, depending how much they tried to overcharge. If it was a better product, they sold more. These days, no-on knows what is reasonable, so you take pot luck.

Nothing will convince me that the majors these days don't operate illegal cartels - there is certainly little to no competition between them, hence the plethora of "price matched to Aldi" deals. If that is not operating a cartel, what is? If they do it as they seem to do, it is totally immoral - if they actually deliberately collude to arrange it that way, that is illegal. I use Tesco because their delivery staff are invariably friendly and carry my stuff upstairs to my kitchen for me, thus saving me a lot of pain. The rest of the firm is just as bad as the others.

It all worked very nicely when I was young though. Many people delivered and/or gave better service and prospered consequently.

No, but they would be exactly the same price (for branded goods) and give a better service for the rest.

If we still had RPM, your beer in the cities would be the same cheap price, as would everything else. Like much of modern life, it is not as good as it was - I was there and I know it was better.

I like modern technology though. Even if the advertising industry gets away with murder and charges outrageous prices for Apple kit, for example, which is no better, and often worse , than others. Caveat Emptor needs to be heeded more than ever it needed to be when I was a nipper.

[Bob Henson]

Too damn true. It was a infinitely nicer world when morality did play a part, though.

[Bob Henson]

It should. But the second hand car dealer is only surpassed in double dealing by estate agents. They were ever thus - R.P.M didn't apply to them so they got away with murder.

[The Natural Philosopher]

Indeed. The free market is not designed to be moral, it exists because it was found to be functionally efficient.

It is governments that interfere and distort it that are immoral as well as cartels and monopolies.

Remember all those profits dont go into the hands of the people that run the business, they go into the pockets of the shareholders of whom you may choose to be one directly, by buying shares, or involuntarily, if your pension fund has invested in them

[SteveW]

There will be some extra costs of running a smaller shop, but the supermarkets will certainly be bulk buying their products at the same price for all their stores, regardless of size?