Blog: blowing the froth off the recession

31 May, 2013

I am told, and I certainly believe, that we are in the middle of a recession. Money is tight, or so they say.†

Most salaries within manufacturing have remained static for over six years, but minimum pay has still crept up, wiping out the differential among the pay grades every year. And net profitability has been the lowest in decades. Yet we survive - just - through better management of cost, efficiencies and innovation to meet the demands of the new markets emerging.

If we are so short of money, can anyone please tell me why the flights out of Manchester airport which go to the usual hot spots are full? Try going out for a Sunday lunch or evening meal at the local eatery at 6pm and, sorry, theyíre full!

Why can the customers of all the fashionable coffee houses afford to pay £2.50 for a coffee, and then another £1.80 for a muffin or cupcake, and they pay without batting an eyelid - unbelievable: £2.50 for a coffee, the actual cost price of which would be no more than 20p maximum. That is quite a profit margin. No wonder Mr Whitbread got out of beer and started to sell coffee.

It would appear that people are quite adamant about recession as long as it does not affect their luxuries of life, or must-have life essentials, such as Sky TV. They minimise the basics while excelling on the extravagances.

But somehow, I feel as though we are being stitched up, and made to pay for somebody elseís crimes - for example, being made to pay bigger wages, which are taxed. This then pays for expensive unnecessary luxuries, which are - youíve guessed it - taxed.

Of course the big four retailers cash in on the recession, by firstly reducing price points to suppliers while maintaining the selling price. Either way, the supplier finances the price drop. One of the majors tries to sell everything for a pound, but when are they going to learn that people in general believe the missive, ďYou get what you pay forĒ and, sooner or later, quality will have dropped so low, that suppliers will refuse to supply and their prices will be hiked dramatically, and the cycle starts all over again.

Have you noticed their (the major retailersí) latest advert: if they over-charge you for an item that you could have bought more cheaply somewhere else, they will give you the difference next time you are in their store.

Do they think we are totally brainless? Letís examine this for a moment: greatly inflate your selling price knowingly, give you back the price difference of your nearest competitor, and then give you a little piece of paper offering you the difference next time you go back into their store to be over-charged yet again. Maybe we are brainless, as many of my friends think this is an awesome feature and happily go back time and again. And sad as it is, the premise goes straight over their heads, as they donít actually care, because they have too much money, but they just donít know it.

I was recalling to my youngest daughter some tales of my early youth, including shopping trips with Grandma. She would literally walk from one side of town to the other with her little trolley just to save pennies on her weekly groceries. This was instilled in her; she had to save money to feed her family, especially during the war years when there really was a sense of austerity. Luxuries were none: clothes were recycled around siblings or cousins; jumpers and cardigans were turned into crocheted blankets; nothing at all was wasted. You walked to work if you were lucky enough to have a job. My Dad, like many other people, walked four miles to work and back for his first job; now there is a taxi rank outside our work gates most mornings and afternoons - and they are not cheap.

So is there really a recession thatís so bad? Maybe - Iím not that qualified to comment. I do feel we are being played because of somebody elseís crimes. But while we continue to pay £2.50 for a cup of frothy milk and a splash of coloured flavoured water, Iíll reserve my judgement.





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