High prices during festive season

2017-01-10 06:01

WITH Christmas a thing of the past it’s important to reflect on the prices of things you purchased.

Fundamentally it is a case of goods being marked higher to generate maximum amount of profit. Have shops now become milking cows of the hardworking consumer?

Why do prices go through the ceiling during Christmas? Could the bonuses received by workers be a catalyst to the exorbitant mark ups during this period?

Why can’t prices remain the same as a token of appreciation for the patronage of the consumer?

The concept of demand and supply is a relevant explanation in this context. However, could this economic phenomenon be used as a reason to extract the maximum amount of cash from consumers.

The day after Christmas is the beginning of many sales in most of or practically all the major chain stores where goods from clothes to toys to Christmas décor is reduced by as much as 60%, and even more.

The simple explanation for these mark downs is that the goods will lie on the shelves because consumers have spent their money.

It makes economic sense to get rid of Christmas stock by creating a demand for those who have budgeted for the anticipated lower prices. At the same time it’s also depressing to walk past a store to see the shirt or dress that you paid R700 for before Christmas now being reduced by 50% or more on 26 December.

The bottom line is that companies use the euphoria and festivities of Christmas as a marketing tool to extract the most amount of money from consumers.

It’s up to the consumer to reflect on the prices and ask themselves if this purchase is really worth it.

Ultimately the power to bring down prices lies in the hands of consumers.

Spontaneous and impulsive buying especially on credit is not the answer. Selective purchases based on needs should be a motivating criteria when swiping that credit card.

All the best for 2017.

Vijay Surujpal

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