Recession - self fulfilling prophecy?

WillowTheWhisp · 22-10-2008, 12:08

Am I being cynical here but I can't help feeling that all this recession business is a bit of a self fulfilling prophecy.

If the word 'RECESSION' is spoken loudly enough people start to panic. Nobody spends money because they are afraid of debt. So far sounds good but then demand falls so supply falls so productivity falls so jobs are lost so people are short of money so they spend less so demand falls more so supply is reduced even further and production falls yet again which leads to more job losses .................. etc.

How do we get out of the spiral?

emzy · 22-10-2008, 12:17

If anything, im spending more than what I used to (rising fuel prices, cost of living etc) but being on a low income i am and have always been quite careful with money anyway, I still have to buy / pay for what i usually do so nothing has changed for me luckily

Think people need to carry on as they normally do, dont see any other way around it really. Pointless panicing over it I think

WillowTheWhisp · 22-10-2008, 12:41

Yes people are spending more because the basic necessities are costing more so that means they have less money available for other things, hence the drop in demand so the drop in supply etc.

It sounds like madness to suggest spending on non-necessities at times like this but would that lead to a rise in demand and therefore a rise in supply/manufacturing/jobs etc and that put more money into the economy?

Gayle · 22-10-2008, 13:14

What gets me are all the adverts for Asda, Tesco, Aldi and the like telling us that prices have been slashed, food is really cheap etc - so why are the 'experts' telling us that food has gone up and things are really expensive?

entwisi · 22-10-2008, 13:19

some things have definately gone up. Bread, eggs etc others are cheaper than ever, beer being one that springs to mind

lindsay ormerod · 22-10-2008, 18:53

We have talked ourselves into this "recession". I have noticed the prices of basic stuff have gone up, my Tesco shop this week looked ok on paper but not a lot when it came to unpacking it. Bacon, spuds, bread seem to have shot up.

mothernature · 22-10-2008, 20:13

Is it a recession though. Food may have gone up at the supermarkets but how do my local Asian shops manage to sell food a lot cheaper than they do. This week I have bought 8Lb Bramleys, full trays of Swedes, Leeks & Turnips (must be 20Lb in weight) and 3 bunches of bananas. Price £4.
Nothing wrong with any of them and the shopkeeper even checked that no spiders where hiding in between the food.
Warbutons Toastie is £1, that's 49p cheaper than all the supermarkets.
Most of the foods they stock appear to be far cheaper all round. Can't say for meat products though (vegetarian). From what I can see, they either aren't making a profit or the supermarkets must have a high profit margin.

West Ender · 22-10-2008, 20:44

I have noticed that the price of petrol (unleaded) has dropped, round here, by about 3p a litre. Our local Shell garage was selling at £1.13 last week but is now down to £1.10. I believe the supermarkets in town have dropped even more but haven't yet checked it out.

My weekly shopping bill is higher than it was 12 months ago, no doubt, but I can't be too specific. I shop online (Sainsburys) about once a month and call into the store, and also Morrisons, in between the "big" orders. My daughter also shops at Morrisons and Tesco so, between us, there's a lot of comestibles coming into the house and I can't price-compare it all as I'm not buying it all.

I haven't changed my habits regarding non-grocery shopping (Boots, M & S, "others"). As it happens, I'm in the market for a new car - hoping, as I'm paying cash, to get a good deal. This is from my "lump sum" when I retired 12 months ago - and promptly became too ill to do anything with it!

I'm also having a "new" bathroom, but the plumber doesn't seem to be too much in need of my custom (see my blog!) so he's obviously not feeling the pinch.

I notice the car park at Lidl, on my way to Sainsbury's, seems fuller these days. I must go in and see what they have on offer.

entwisi · 23-10-2008, 08:33

If you are paying over £1 a litre for standard unleaded you need to shop elsewhere. 98.9 in most places now!

andrewb · 23-10-2008, 08:52

Quote:

Originally Posted by mothernature

Is it a recession though. Food may have gone up at the supermarkets but how do my local Asian shops manage to sell food a lot cheaper than they do. This week I have bought 8Lb Bramleys, full trays of Swedes, Leeks & Turnips (must be 20Lb in weight) and 3 bunches of bananas. Price £4.
Nothing wrong with any of them and the shopkeeper even checked that no spiders where hiding in between the food.
Warbutons Toastie is £1, that's 49p cheaper than all the supermarkets.
Most of the foods they stock appear to be far cheaper all round. Can't say for meat products though (vegetarian). From what I can see, they either aren't making a profit or the supermarkets must have a high profit margin.

Supermarkets are a funny beast. On the one hand they have billions of pounds profit and have had it for years, allowing them to potentially absorb the cost of the recession somewhat. On the other hand they employee thousands and thousands of staff in big huge warehouses and shopping centres, which all have massive overhead costs and that's before we get on to transport, wastage etc etc.

It is very often the case that independent retailers can match or beat supermarket prices on many goods. I think the real reason people go to supermarkets is convenience because not everybody has time to shop around.

jaysay · 23-10-2008, 09:08

Quote:

Originally Posted by andrewb

Supermarkets are a funny beast. On the one hand they have billions of pounds profit and have had it for years, allowing them to potentially absorb the cost of the recession somewhat. On the other hand they employee thousands and thousands of staff in big huge warehouses and shopping centres, which all have massive overhead costs and that's before we get on to transport, wastage etc etc.

It is very often the case that independent retailers can match or beat supermarket prices on many goods. I think the real reason people go to supermarkets is convenience because not everybody has time to shop around.

To me Andrew that doesn't stack up, as some one who spent years working in small corner shops in the 70s, i. e. fitting them out rather than behind the counter selling, you listen to what the retailers say and they all used to say that with the advance of the Super Markets the small shop keeper would soon be a thing of the past, as they couldn't compete. In fact one of the bigest shopfitting firms in the country, Shopfitters Lancashire Ltd, catered for the small corner shop and as we know that firm in Ossy (which in its prime employe over 500 people) is long gone. I think ther is a valid point on how asian shops can sell things that cheap, maybe mani can shed some light on this

andrewb · 23-10-2008, 09:22

Well I don't know specificly about your regular corner shop, but when I go to the butchers its much cheaper than the supermarket and far better quality. When I go to the fruit and veg shop its much cheaper than Tesco and much fresher products. There is no doubt that supermarkets can be cheap with lossleading products, its just whether people shop around for those products or buy everything else while they're there and get stung by the hidden higher prices.

mothernature · 23-10-2008, 11:22

Quote:

Originally Posted by andrewb

Well I don't know specificly about your regular corner shop, but when I go to the butchers its much cheaper than the supermarket and far better quality. When I go to the fruit and veg shop its much cheaper than Tesco and much fresher products. There is no doubt that supermarkets can be cheap with lossleading products, its just whether people shop around for those products or buy everything else while they're there and get stung by the hidden higher prices.

What are lossleading products and hidden higher prices?

andrewb · 23-10-2008, 11:27

Quote:

Originally Posted by mothernature

What are lossleading products and hidden higher prices?

Loss leading is when a shop will sell products at a loss to themselves, and advertise it, but then make the profit up on other products in the store, or other connecting products. When I say 'hidden higher prices' I mean higher prices on goods that you just don't notice, so end up paying more than perhaps you might pay elsewhere.

jaysay · 23-10-2008, 12:15

Quote:

Originally Posted by andrewb

Loss leading is when a shop will sell products at a loss to themselves, and advertise it, but then make the profit up on other products in the store, or other connecting products. When I say 'hidden higher prices' I mean higher prices on goods that you just don't notice, so end up paying more than perhaps you might pay elsewhere.

Lost leaders are all part of merchandising and are usually placed right at the back of the shop or store so that you have to pass everyhing else on your way to pick it up