Wednesday, 1 February 2012

Dreaded sales in the cold climate

There is something quite deceiving about January sales. For one thing its frighteningly cold outside (In Europe at least) and people are looking for any excuse to go into a shop, which may have heating. Secondly there is an animal instinct, probably not fully documented but more pronounced in females of our species, which homes in on any shop whose windows exclaim '50% OFF'  with the words 'upto' and/or 'On selected items' in very small script.
In my case I have the additional problem in the form of my skepticism that famous brands tend to put out 'sale' merchandise which they might not sell normally and hence give their 'sale' prices a look and feel of a bargain. This (skepticism) has grown ever since a Macy's salesman told me that I should not be fooled by the difference between the original and the sale price. I had dared to tell the man that the sale price had seemed comparable to the normal price of the particular product I was interested in. He further confided that in the US no one buys anything unless it was on sale, so Macy's seemed to have sales all year long, with the sale price being what one would find normal.
There are exceptions. Here where we live the small shops that sell clothes and shoes etc have good sales and you can see that the same items which were available before, have now lower prices as part of the sale. Perhaps the sales are more genuine the smaller the outlet. The other day we went into a small Habitat outlet in Bilbao, and sure enough they had some items on sale..but mostly these were out of season items like Xmas cards and small gifts which after the Christmas rush are now going to be not in demand. Fair enough I say, however we now have enough cards for the next two Xmas and New Year cycles and a quantity of small frames to line all the walls of the apartment with photos. Its a bit like having people over for lunch and making so much food that the hosts keep eating for weeks afterwards.
I exaggerate, and recently our lunch guests have absolutely devoured every last bit of the Indian food that Marisol dished up for them. The Indian lunches are becoming a bit of a reputation and all our friends are perhaps waiting for their invitation. The dining room being small this can only happen for a few friends at a time. The ingredients may soon run out and we may have to make a trip to London to stock up again. Perhaps we have to learn a few recipes which only require local ingredients so that we can sleep easy that the Tandoori Chicken Massala is not about to run out!!
Local ingredients are in plentiful supply, since the economic crises has singled out the groceries supermarkets as the one business that is booming. Every conceivable chain of supermarkets now has a big store within a few hundred meters of our home. Some whose owners are freezing up north in Germany and France. How can a population of perhaps ten thousand have so many supermarkets, I ask myself. How much turnover a large buisness needs to have to make it viable?
Lets say that Telco (perhaps a subsidiary of Tesco?) employs twenty people..I would guess that the employee costs are perhaps as much as half a million Euros a year.What would be an employee to turnover ratio? perhaps 10 or 20 or more? A guesstimate would be 5 to 10 million turnover and there are ten of them.
So a total of an average - 75 Millions which means we are spending 7500 per person? An average family is spending 15000 Euros per year on groceries? NO WAY. Even if I got the figures wrong by a factor of 2.
Anyway these are times of crisis, perhaps when the economy improves, these stores will be in a good position to cash in. I doubt that this can be their buisness model.. And we did not count all the small shops like fishmongers, butchers, fruits etc etc.
I am glad I dont have to compete in this sale business, could be depressing to run a business.

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