Price wars? #thrifty
Food and energy
Food and energy prices soared after the 2008 credit crunch and we are likely to see the same now the markets are in turmoil again. It’s is a good time to look at how you can save money on energy bills, food and travel costs. Remember when petrol and diesel prices soared and came close to 150 a litre? Price wars between filling stations have reduced prices but for how long?
After the credit crunch of 2008, companies found it increasingly difficult to get finance and investment and the pound fell as the UK government introduced quantitative easing. Other governments adopted similar monetarist policies and that helped restore the value of the pound against the reserve currency which is the United States dollar.
The supermarkets have been struggling since 2008 and competition has been fierce. The discount supermarkets, Aldi and Lidl have eaten into the market share of the big four; Sainsburys, Tesco, Asda and Morrisons. There has been a price war and Tesco has been fighting back by improving service, closing loss-making stores and abandoning 24-hour opening. Their accounting scandal also hit Tesco hard and so they have been making other improvements. Now they and all the supermarkets face a new challenge. Walmart the parent company of Asda have announced that increased sales will now be more important than profits. This is seen as a declaration of war on the other supermarkets. They intend to cut prices even further and the result could mean one of the big four going out of business. Having used Aldi, Lidl, Asda, Tesco and Morrison’s, I think they all face increased risk. Aldi in my experience is the one most on the ball with speedy service and friendly staff. Tesco’s once surly staff seem to have had a little staff training and are being nice to customers. Asda seems to have a policy of slow checkouts to encourage people to use self-checkout terminals. I find that annoying. Morrison’s are winning on choice and quality but it can be chaos at the checkouts. It will be interesting to see who wins the price war. For me, Morrison’s seems to have added risk because of parking problems. Although, Aldi and Lidl have smaller car parks I have fewer problems shopping there as far as parking is concerned. The use of Parking Eye could affect trade at some Aldi stores, though. In the short-term, the price wars will benefit us customers, but if one chain does go out of business we will lose in the long run.
Online – offline
There is another price war going on between online stores and the offline stores. Aldi has now made its special buys available online. Poundland has also entered the online marketplace. The big benefit for consumers is the price war between Amazon and most offline stores. You can buy everything from shoes to a 40-inch television on Amazon. I would buy the latter from Amazon, but would buy shoes offline and try them on. Stores like Curry’s have intense competition from the likes of Amazon but they are competing.
If we listen to experts from the IMF and other credible sources we can expect the economy to slow in the next few years. The stock market is in turmoil and SME’s are having problems with finance and investment. The country is politically polarised between right and left and lacks leadership. We, as consumers need to be prepared for higher energy bills and higher travel costs and we could even face another recession. I will continue to shop around, be thrifty and keep waste to a minimum. The media tells us what we should buy. They tell us we need a better car, the latest fashions and that wildflowers are weeds and should be exterminated. Be a rebel, let the wild flowers grow, wear yesterday’s fashions and tell the neighbours that your old car is a classic. Price wars will help to keep some prices down but the future is looking far from rosy.