Self Inflicted Cost of Living
Discussion
Interesting reading financial performances of stores over Christmas as figures released. Lo and behold their figures are all massively improved despite the "cost of living crisis". We've also seen it for energy companies too.
The "inflation" is only inflating profits as sales volumes are no higher, but profit on those sales is inflated. Being cynical, is the inflation and "cost of living" self perpetuating, created by a media looking for some sensation and us mugs pick up the tab?
The "inflation" is only inflating profits as sales volumes are no higher, but profit on those sales is inflated. Being cynical, is the inflation and "cost of living" self perpetuating, created by a media looking for some sensation and us mugs pick up the tab?
I don't believe that's true of the energy companies, which is a bit of a broad term. If we are talking about the likes of Shell then yes, but for the energy providers who aren't generating/sucking the stuff out the ground I don't think they are seeing massive profits.
As for the high street shops. Think it was expected that people would spend just as much as normal if not more, people can't help themselves, they are addicted to spending. I also think there's a big chunk of people in the middle who haven't yet been hit with a reality check. They are sitting still paying a DD for energy on estimated usage unaware of what they are actually using, how it's calculated and unaware that they are about to get a kick in the balls.
As for the high street shops. Think it was expected that people would spend just as much as normal if not more, people can't help themselves, they are addicted to spending. I also think there's a big chunk of people in the middle who haven't yet been hit with a reality check. They are sitting still paying a DD for energy on estimated usage unaware of what they are actually using, how it's calculated and unaware that they are about to get a kick in the balls.
nunpuncher said:
I don't believe that's true of the energy companies, which is a bit of a broad term. If we are talking about the likes of Shell then yes, but for the energy providers who aren't generating/sucking the stuff out the ground I don't think they are seeing massive profits.
As for the high street shops. Think it was expected that people would spend just as much as normal if not more, people can't help themselves, they are addicted to spending. I also think there's a big chunk of people in the middle who haven't yet been hit with a reality check. They are sitting still paying a DD for energy on estimated usage unaware of what they are actually using, how it's calculated and unaware that they are about to get a kick in the balls.
The direct debit is set by your previous consumption, and many have cut down a little bit since then. So how in anyway will they get a kick in the balls? The only ones who suffer right now are the pre pay meters because they won't be paying the extra during the summer. The fact its the poorest on those doesn't help. As for the high street shops. Think it was expected that people would spend just as much as normal if not more, people can't help themselves, they are addicted to spending. I also think there's a big chunk of people in the middle who haven't yet been hit with a reality check. They are sitting still paying a DD for energy on estimated usage unaware of what they are actually using, how it's calculated and unaware that they are about to get a kick in the balls.
The only reality check people in the middle get will be when the mortgage fix ends. Mines ends in 20 months time. My payment would go from £233 to around 400, so could only imagine a big mortgage. Ofcourse it won't because that's at an unacceptable interest payment to me so I'll pay it off.
People will notice the council tax jump. It was hidden with the £150 payment last year. So it'll be a double increase this year. Ofcourse many have had a raise since then to compensate. The poorest won't be affected as its paid for them or ignored. They won't put them all on the street.
Many car leases will be up by then aswel. I bet they will go into something cheaper to compensate. That way you can continue again with your life. Eating out, holidays, all the good stuff. We'll be fine. Ignore the news.
Our company. Big 4 retailer. Sales turnover is up because of price rises. Profit is up compared to last year but only the same percentage difference as costs are up.
So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
as for being ripped off, how come I can,
Buy LPG for my heating at 43p +vat a litre, deal was done in November. Surely it is more expensive to deliver gas on a lorry than pump it up a pipe.
I can buy petrol for £1.359 a litre at the local independent station and the news yesterday said petrol was down to £1.50 a litre and the supermarkets here are charging that . Petrol has not cost me more than £1.43 since September. If some can sell at those prices and not go bust then the others are surely taking advantage of this cost of living thing.
Buy LPG for my heating at 43p +vat a litre, deal was done in November. Surely it is more expensive to deliver gas on a lorry than pump it up a pipe.
I can buy petrol for £1.359 a litre at the local independent station and the news yesterday said petrol was down to £1.50 a litre and the supermarkets here are charging that . Petrol has not cost me more than £1.43 since September. If some can sell at those prices and not go bust then the others are surely taking advantage of this cost of living thing.
Work in a medium size clothing retailer. Up to Christmas was OK, since 2nd Jan the cliff edge drop has happened. Massive return rate in the online arm.
Used to work in very large grocer - customers always treat themselves for Christmas, often trading up into more profitable lines rather than the standard product. I'd treat Christmas numbers with a bit of caution. Q4 trade Trade and year end updates in April/May will be the ones to watch.
Used to work in very large grocer - customers always treat themselves for Christmas, often trading up into more profitable lines rather than the standard product. I'd treat Christmas numbers with a bit of caution. Q4 trade Trade and year end updates in April/May will be the ones to watch.
vulture1 said:
Our company. Big 4 retailer. Sales turnover is up because of price rises. Profit is up compared to last year but only the same percentage difference as costs are up.
So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
In % margin you are right, it's still 50% margin overall but your cash is up 20% in your example. The gap on cash is growing even if % margin is staying the same and this is what the retailers are leveraging (And payment terms and then not paying invoices on time, then querying 1 line on an invoice when the rest is correct and paying nothing etc etc )So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
ARHarh said:
as for being ripped off, how come I can,
Buy LPG for my heating at 43p +vat a litre, deal was done in November. Surely it is more expensive to deliver gas on a lorry than pump it up a pipe.
I can buy petrol for £1.359 a litre at the local independent station and the news yesterday said petrol was down to £1.50 a litre and the supermarkets here are charging that . Petrol has not cost me more than £1.43 since September. If some can sell at those prices and not go bust then the others are surely taking advantage of this cost of living thing.
Same as motorway prices are always higher.Buy LPG for my heating at 43p +vat a litre, deal was done in November. Surely it is more expensive to deliver gas on a lorry than pump it up a pipe.
I can buy petrol for £1.359 a litre at the local independent station and the news yesterday said petrol was down to £1.50 a litre and the supermarkets here are charging that . Petrol has not cost me more than £1.43 since September. If some can sell at those prices and not go bust then the others are surely taking advantage of this cost of living thing.
There was a 3 way battle between our local petrol stations in Aberdeen. some site telling everyone who was cheapest. So everyone moved to whichever was the cheapest. Usually not an issue but the difference was up to 10-15p a litre. Tesco were late to change then suddenly they went down and the other two went up. Massive queues at the Tesco now.
The jiffle king said:
vulture1 said:
Our company. Big 4 retailer. Sales turnover is up because of price rises. Profit is up compared to last year but only the same percentage difference as costs are up.
So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
In % margin you are right, it's still 50% margin overall but your cash is up 20% in your example. The gap on cash is growing even if % margin is staying the same and this is what the retailers are leveraging (And payment terms and then not paying invoices on time, then querying 1 line on an invoice when the rest is correct and paying nothing etc etc )So instead of £1000 sales and 500 profit with 500 costs its 1200 sales 600 profit 600 costs. Which is inflation.
But on the books that still looks better as profit up sales up
the only real winner at xmas was Aldi (actually they are now 1 of the big 4) and Lidl.
The rest were only up due to price rises though Morrisons we actually down.
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