BREAK IN PRICES.

Taranaki Daily News, 4 January 1921, Page 6

BREAK IN PRICES.

POSITION IN ENGLAND CONDITIONS WILL COMPEL REALISATION. COST OF PRODUCTION. In a recent issue of the Morning Post appears an article under the above heading. The trading world (it says), anticipates a break in prices very shortly in almost all commodities except foodstuffs. Consumers, who have been nurturing in many cases serious grievances against retailers, whom they considered to be making undue profits out of the after-war scarcity of things, can hope to get some of their own back now, for it is more than probable that retail and wholesale houses will have to make real sacrifices with goods that they bought dear, and will have to sell cheap .. Tbere-kas been, of course, always “a ease” in defence of the trader, but that case has not been easy -of popular statement. The public have seen the enormous increase of prices with angry bewilderment, and have not recognised always that a large part of the increase was due to greater raw material costs, much greater labor and transport cost at every stage, and much greater State and municipal taxation of the warehouseman and shopkeeper. But withal, like everybody else, except the unfortunate middle class, with its usually inflexible income, traders generally have managed to stretch their profits to meet, or more than meet, post-war conditions Now it would seem that they will have to fa-ce some real sacrifices. PRODUCTION COSTS DECREASING. The position is that production costs in many commodities are falling, owing to raw material costs coming down and also to labor costs coming down in countries where Labor has recognised that the world is not richer for the war and is working hard to make good. New goods coming to hand, or now near at hand, are over a wide range of commodities cheaper than goods in stock. Further, the fund available for purchases by the public has dwindled enormously. Part of the inflation of , values was due to the frenzied demand for goods by people who were getting , unearned, and sometimes unexpected, money in direct Government subsidies , or in loot on Government - contracts. The purchasing power of the public these last two hectic years has been far . in excess of the earning power. Now that has, to a great extent, stopped, though there are still subsidies to wages and subsidies to reduce commodity values which represent the spending of capital borrowed or confiscated by the Government. The community has, how- , ever, come much nearer to a standard r of purchase consistent with its real earnings.

A BREAK MUST COME. Cuts in prices are the inevitable sequel. It is a fatal thing in business for a trader to find himself left with unrealised stocks to face a new season and a lower range of prices. “The secret of profitable business is courage to sacrifice, if necessary, to destroy, old stock”—that is the axiom of one great

trader. Retailers in London had a rathei disappointing experience with the summer sales. Since then those who w'shed to hang on to stocks in the hope of realising them one day, have been subjected to steady pressure from the banks who will not, indeed cannot, in view of the financial position, finance such “hold-overs.” “Realise” is the order of the day, and realisation is only possible on a large scale at such prices as will tempt the public to buy far more freely than at present. It is not probable that British business houses will follow the somewhat sensational example set recently by America, and embark on a “panic” selling policy. But a break in prices representing real sacrifices on the part of the sellers is very confidently predicted.